You have been given the data on nine observations of volume and cost below. The data is the same as that in the previous problem except for one observation.

Using the high–low method:
A. Identify the high and low observations B. Compute the difference in volume between the high and low observations C. Compute the difference in cost between the two observations D. Compute the ratio of change in cost to change in volume E. Compute the amount of variable cost at the high level of activity F. Compute the fixed cost at the high level of activity G. State the equation for the relation of costs to level of activity.

Transcribed Image Text:

Volume 20 30 Cost ($) 204 242.4 40 287.2 70 343.6 100 384.6 131 480.4 230 805.4