Ricco was reviewing the water bill for his carwash business and determined that the highest bill, $6,000, occurred in July when 2,000 cars were washed. The lowest bill, $4,500, occurred in February when 1,000 cars were washed. Use the high-low method to answer the following questions.
-What is the estimated cost of water at the car wash if 1,700 cars are expected to be washed?

Question

Quizplus · Accepted Answer

First, calculate the variable cost per car using the high-low method: ($6,000 - $4,500) / (2,000 - 1,000) = $1.50 per car. Then, calculate the fixed cost: $6,000 - ($1.50 * 2,000) = $3,000. The total cost for 1,700 cars is: $3,000 (fixed cost) + ($1.50 * 1,700) = $5,550.

Ricco Was Reviewing the Water Bill for His Carwash Business