E21-30 determining mix cost- the high-low method

The manager of quick car inspection reviewed the monthly operating cost for the past year. The cost range from $4400 for 1400 inspections to $4200 for 1000 inspections.

Requirements

1. Calculate the variable cost per inspection.

2. Calculate the total fixed cost.

3. Write the equation and calculate operating cost for 1200 inspections.

4. Draw a graph illustrating the total cost under this plan. Label the axis, and show the cost at 1000, 1200, and 1400 inspections