High-low method (Learning Objective 4)}

Refer to Dave's “Golden Brown" Pancake Restaurant in E6-25.

1. Use the high-low method to determine Dave's operating cost equation.

2. Use your answer from Requirement 1 to predict total monthly operating costs if Dave serves 4,000 pancakes one month.

3. Can you predict total monthly operating costs if Dave serves 10,000 pancakes a month? Explain.