• FreshBakery, a chain of bakeries, is examining its ingredient costs related to the number of products baked.
• Data Overview:
  • Low Activity Month: Total Costs: $10,000, Products Baked: 5,000
  • High Activity Month: Total Costs: $16,000, Products Baked: 8,000
• Required Analysis:
  • Use the High-Low Method to determine the variable cost per product baked and fixed costs.
  • Develop a cost equation.
  • Estimate the total costs for baking 10,000 products.
  • Discuss the benefits of bulk purchasing to reduce ingredient costs.