(6 marks)The table below was produced after recording the processing costs of Oki Products observed over the last 10 months using the following data:

Month

Units Produced

Processing Costs

1

7,500

$44,000

2

11,000

52,000

3

15,000

59,000

4

5,500

38,000

5

9,000

47,000

6

8,500

52,000

7

2,500

28,000

8

7,000

41,000

9

11,500

52,000

10

6,000

41,000

Required:MAKE SURE THAT YOU SHOW ALL OF YOUR CALCULATIONS AND PROPERLY LABEL EACH ITEM FOR FULL MARKS

a)Use the high-low method to estimate the variable processing cost per number of units produced. (1.5 marks)

b)Use the high-low method to estimate the total fixed processing cost per month. (1.5 mark)

c)Express the fixed and variable components of processing cost in the form of a formula (See your answers in a) and b)).Use this formula to estimate the total processing cost at an activity level of 20,000 units produced. (1 mark)

d)When the data provided in the table above is plotted on a scatter graph, the graph indicates that there is a strong linear relationship between total processing costs and units produced.Given that information, is there any problem with estimating total processing cost at an activity level of 20,000 units produced as we did in c) above?The question can be answered in one sentence. (1 mark)

e)What other methods other than the high-low method are used in estimating the fixed and variable components of a mixed cost?Name two other methods. (1 mark)