staff meeting has been called at Sports Lab, a drug-testing facility retained by several professional and university sport leagues and associations.

The chief of testing, Dr. Levendis, has demanded an across-the-board increase in prices for a particular test due to the increased testing and precision that is now required.

The administrator of the laboratory has asked you to measure the mixedcost behaviour of this particular testing department and to prepare a short report that she can present to Dr. Levendis. Consider the limited data below:

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Monthly averages, 2004 Monthly averages, 2005 Monthly averages, 2006 AVERAGE TEST PROCEDURES PER MONTH 500 600 700 AVERAGE MONTHLY COST OF TEST PROCEDURES $ 60,000 70,000 144,000