Sweet Copy Printing wants to predict copy machine repair ex

Sweet Copy & Printing wants to predict copy machine repair expense at different levels of copying activity (number of copies made). The following data have been gathered:

Determine the fixed and variable components of repair expense using the high-low method. Use copies made as the measure of activity. (Round variable component per copy to 2 decimal places, e.g. 0.15.)

Solution

Variable Component=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)

=(13190-6100)/(1026000-317000)=$0.01

Fixed Component=13190-(1026000*0.01)=$2930.