Question
High-low method Evander Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the
High-low method
Evander Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:
| Units Produced | Total Costs |
|---|---|
| 2,000 | $468,000 |
| 4,080 | 681,720 |
| 6,000 | 728,000 |
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
a. Determine the variable cost per unit and the total fixed cost. Variable cost $_____ Total fixed cost $_____
b. Based on part (a), estimate the total cost for 2,880 units of production. Total cost for 2,880 $_____
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