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A company has recorded the following total costs during the last 5 months. Month Output volume (units) Total costs ($) 1 150 1,120 2 100
A company has recorded the following total costs during the last 5 months. Month Output volume (units) Total costs ($) 1 150 1,120 2 100 1,000 3 160 1,210 4 200 1,500 5 180 1,410 Required (1) Use the high-low method to calculate the total costs that should be expected in Month 6, if output of this month is 250 units. (5 marks) (2) Discuss the limitations of the High-low method in calculating fixed and variable costs.
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