Daraz.pk is a fast growing e-commerce business in Pakistan. Daraz delivers the product ordered on its website to the customer’s doorstep. The management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. The relevant range is 1000 to 6000 miles. If the number of miles traveled increases from 6000, then the variable cost per unit would remain constant whereas fixed cost would increase by 10%. Following is the information:
Month
Miles
Shipping Cost
January
4,200
$48,000
February
1,500
24,000
March
1,100
16,000
April
2,900
35,000
May
5,100
52,000
June
2,200
32,000
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