Maxim manufactures a hamster food product called green health. maxim currently has 10,000 bags of green health on hand. the variable production costs per bag are $1.80 and total fixed costs are $10,000. the hamster food can be sold as it is for $9.00 per bag or be processed further into premium green and green deluxe at an additional cost. the additional processing will yield 10,000 bags of premium green and 3,000 bags of green deluxe, which can be sold for $8 and $6 per bag, respectively. the incremental revenue of processing green health further into premium green and green deluxe would be:

Exercise 2-12 cost behavior; high-low method [lo2-3, lo2-4] speedy parcel service operates a fleet of delivery trucks in a large metropolitan area. a careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. if a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. required: 1.& 2. using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (round the "variable cost per mile" to 3 decimal places.)