Assignment - Cost Behaviour Washington Lumber manufactures and sells wood products. WL has provided the following information for the factory overhead cost pool: Units of output 40,000 units 55,000 units Indirect materials $280,000 $385,000 Indirect labour $180,000 $247,500 Supervisor salaries $165,000 $165,000 Deprecation, Plant $350,000 $350,000 Maintenance $212,500 $277,000 Utilities $148,700 $189,500 Total $1,336,200 $1,614,000 Required: Using the high-low method and the information provided above, 1 2 3 Identify the linear cost function equation for total overhead. Estimate the total cost at 52,000 units of output. Washington Lumber is now budgeting overhead costs of next year. It expects indirect material costs will increase by 4%, indirect labour and supervisor salaries will be 5% higher, the variable portion of maintenance costs will increase by 3%, and the fixed portion of utilities will increase by $10,000. All other costs will remain at this year's level. What is the expected cost function for next year? If the company expects to produce 54,000 units, what is the total expected cost at this level of output? If the company expected to sell 70,000, would you be able to use the same cost equation from above to predict costs at 70,000 units of output? Why or why not? Explain for full marks