Requirement 3. If Radig Travel expects each helicopter to make, on average, 1,200 round-trips in the coming year, what should its estimated operating budget for the helicopter fleet be? Radig Travel's estimated operating budget for all 8 helicopters in the fleet combined should b

the first part of the question is missing:

"Radig Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 8 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000

Round-trips in the year incurs an average operating cost of $300 per round-trip, and one that has made 2,000 round-trips in the year incurs an average operating cost of $250 per round-trip.

Using the high-low method, estimate the annual operating costs:"

variable costs per trip (per helicopter) =  ($500,000 - $300,000) / (2,000 - 1,000) = $200,000 / 1,000 = $200 per trip

fixed costs = $500,000 - (2,000 x $200) = $500,000 - $400,000 = $100,000

the estimated operating budget per helicopter = $100,000 + (1,200 x $200) = $100,000 + $240,000 = $340,000

operating budget for the whole fleet (8 helicopters) = 8 x $340,000 = $2,720,000

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30