Hi, Please kindly assist me with how to deal with a using the high-low method of separating fixed costs element from total costs, where there is a step fixed cost element in the total costs. Thanx

The above is a Cost and management accounting question .

23.15 Basic. A company is estimating its costs based on past information. The total costs incurred by the company at different ievels of output were as follows: Total costs Output funits) 160000 185000 190000 2420000 2775000 2840000 The company uses the high-low method to separate total costs into their fixed and variable elements. Ignore inflation. The estimated total costs for an output of 205000 units is: (a) $2870000 (b) $3050000 (c) $3064211 (d) $3080857 (2 marks) The company has now established that there is a stepped increase in fixed costs of $30000 when output reaches 180000 units. The estimate of total costs for an output of 175000 units using the additional information is: (a) $2645000 (b) $2275000 (c) $2615000 (d) $2630000 (2 marks CIMA P1 Performance Operations 23.15 Basic. A company is estimating its costs based on past information. The total costs incurred by the company at different ievels of output were as follows: Total costs Output funits) 160000 185000 190000 2420000 2775000 2840000 The company uses the high-low method to separate total costs into their fixed and variable elements. Ignore inflation. The estimated total costs for an output of 205000 units is: (a) $2870000 (b) $3050000 (c) $3064211 (d) $3080857 (2 marks) The company has now established that there is a stepped increase in fixed costs of $30000 when output reaches 180000 units. The estimate of total costs for an output of 175000 units using the additional information is: (a) $2645000 (b) $2275000 (c) $2615000 (d) $2630000 (2 marks CIMA P1 Performance Operations