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  3. kim smith, owner of flower power, operates a local

Kim Smith, owner of Flower Power, operates a local chain of floral shops. Each shop...

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Accounting

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Kim Smith, owner of Flower Power, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Smith wants to set the delivery fee based on the distance driven to deliver the flowers. Smith wants to separate the fixed and variable portions of the van's operating costs to get a better idea of how delivery distance affects these costs. Here are the data from the past seven months: View the data. Use the high-low method to determine Flower Power's cost equation for van operating costs. Use your results to predict van operating costs at a volume of 15,500 miles. Let's begin by determining the formula that is used to calculate the variable cost (slope). Change in cost Change in volume = Variable cost ( slope ) Now determine the formula that is used to calculate the fixed cost component. Total operating cost - Total variable cost = Use the high-low method to determine Flower Power's operating cost equation. (Round the variable cost to the nearest cent and the fixed cost to the nearest whole dollar.) y=x+ Data

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