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E21-32 determining mixed Costs- the high-low method

The manager of Trusty Car Inspection reviewed the monthly operating costs for the past year. The costs ranged from $4,300 for 1,300 inspections to $3,900 for 900 inspections.

Requirements

1. use the high-low method to calculate variable cost per inspections.
2. calculate the total fixed costs
3. write the equation and calculate the operating costs for 1,000 inspections
4. draw a graph illustrating the total costs under this plan. Label the axes, and show the costs at 900, 1,000 and 1,300 inspections.