Ex 47 Highlow method Inc has decided to use the highlow meth

Ex 4-7 High-low method Inc. has decided to use the high-low method to estimate the total cost and the fi duction are as follows: xed and variable cost components of the total cost. The data for various levels of pro- Units Produced 10,000 15,000 22,500 Total Costs $700,000 840,000 920,000 a. Determine the variable cost per unit and the fixed cost. b. Based on part (a), estimate the total cost for 14,000 units of production.

Solution

ANSWER OF EX-4-7:

A.VARIABLE COST AND FIXED COST:

B. ESTIMATED TOTAL COST FOR 14000 UNITS: