. Ramone Travel offers helicopter service from suburban towns to John F. Kennedy
ID: 2523533 • Letter: #
Question
. Ramone Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City Each of its 15 helicopters makes between 1,350 and 2,100 round-trips per year. The records indicate that a helicopter that has made 1,35 2.100 round-trips in the year incurs an average operating cost of $350 per round-trip. 0 round-trips in the year incurs an average operating cost of $450 per round-trip, and one that has made Read the requirements Olpo 350135000 135000 aloo 350 1350 450 07500 Ent Requirement 1. Using the high-low method, estimate the linear relationship y-a+ bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the year $378,000+ y$378.000 $170 73600D- (1no.ao) Requirement 2. Give examples of costs that would be included in a and in b. a57600 37800o Begin by selecting which type of costs "a" and "b" represent, then select the costs that correlate with that cost type, use each cost only once. Fixed costs Variable costs 735000 378000(17o.aloo) Depreciation Insurance Salaries Baggage handling Fuel Landing fees Requirement 3. If Ramone Travel expects each helicopter to make, on average, 1,700 round-trips in the coming year, what should its estimated operating budget for the helicopter fleet be? Ramone Travel's estimated operating budget for all 15 helicopters in the fleet combined should be $ 1: Requirements 1700 -15-450 1. Using the high-low method, estimate the linear relationship y a + bX, where y is the total annual operating cost of a helicopter and X is the number of round-trips it makes to JFK airport during the yearExplanation / Answer
Answer
Variable Cost = 170
Fixed Cost = 378,000
Cost of 1,700 Round Trips = $378,000 + ($170 * 1700 Round Trips)
Cost of 1,700 Round Trips = $667,000
Now, we have to find out the total cost of all 15 Helicopters,
= Cost of one helicopter 1,700 round trips * 15 Helicopters
= $667,000 * 15 Helicopters
Cost of all 15 Helicopters = $10,005,000
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