Reisen Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 10 helicopters makes between 1 comma 000 and 2 comma 000 round-trips per year. The records indicate that a helicopter that has made 1 comma 000 round-trips in the year incurs an average operating cost of $350 per round-trip, and one that has made 2 comma 000 round-trips in the year incurs an average operating cost of $300 per round-trip.
a. 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.
b. Give examples of costs that would be included in a and in b.
c. If Reisen Travel expects each helicopter to make, on average, 1,300 round-trips in the coming year, what should its estimated operating budget for the helicopter fleet be?