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:

Output

(units)

Total costs

160,000

2,420,000

185,000

2,775,000

190,000

2,840,000

The company uses the high-low method to separate total costs into their fixed and variable elements. Ignore inflation.

1. The estimated total costs for an output of 205,000 units is:

Select one:

A.2,870,000

B.3,050,000

C.3,064,211

D.3,080,857

2.The company has now established that there is a stepped increase in fixed costs of 30,000 when output reaches 180,000 units.

The estimated total cost for an output of 175,000 units is: