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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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