Basic. A company is estimating its costs based on past information. The total costs incurred by the company at different levels of output were as follows:

The company uses the high-low method to separate total costs into their fixed and variable elements. Ignore inflation.
The estimated total costs for an output of 205000 units is:

(a) $2870000

(b) $3050000 (ce) $3064211

(d) $3080 857 (2 marks)
The company has now established that there is a stepped increase in fixed costs of $30000 when output reaches 180000 units.
The estimate of total costs for an output of 175000 units using the additional information is: : :

(a) $2645000

(b) $2275000

(c) $2615000

(a) $2630000 (2 marks)
CIMA Pi Performance Operations

Transcribed Image Text:

Output (units) 160000 Total costs $ 2420000 185000 2775000 190000 2840000