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1. Using the High-Low Method
Hector's Delivery Service uses four small vans and six pickup trucks to deliver small packages in the Char- lotte, North Carolina, metropolitan area. Hector spends a considerable amount of money on the gas, oil, and regular maintenance of his vehicles, which is done at a variety of service stations and repair shops. To budget his vehicle expenses for the coming year, he gathers data on his expenses and number of deliveries for each month of the current year.
Total VehicleExpenses
TotalDeliveries
January
$145,329
5,882
February
133,245
5,567
March
123,245
5,166
April
164,295
6,621
May
163,937
6,433
June
176,229
6,681
July
180,553
7,182
August
177,293
6,577
September
155,389
5,942
October
150,832
5,622
November
152,993
5,599
December
201,783
7,433
Required Use the high-low estimation method to determine the relationship between the number of deliv- eries and the cost of maintaining the vehicles.
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