Cost Behavior Analysis in a Restaurant: High-Low Cost Estimation Potbelly’s Assume a Potbelly’s restaurant has the following information available regarding costs at levels of monthly sales:

Required

a. Identify each cost as being variable, fixed, or mixed.

b. Use the high-low method to develop a schedule identifying the amount of each cost that is mixed or variable per unit. Total the amounts under each category to develop an equation for total monthly costs.

c. Predict total costs for a monthly sales volume of 9,800 units.

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Cost of food sold Wages and fringe benefits Fees paid delivery help.. Monthly sales in units 5,000 8,000 10,000 $10,000 $16,000 $20,000 4,200 4,320 4,400 1,100 1,760 2,200 Rent on building.... 1,100 1,100 1,100 Depreciation on equipment 900 900 900 Utilities 800 920 1,000 Supplies (soap, floor wax, etc.) 250 340 400 Administrative costs.. 1,700 1,700 1,700 Total $20,050 $27,040 $31,700