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High-Low Method Harborville Company provided the following data related to medical costs for providing radiology services and the estimated number of # X-rays processed from

High-Low Method

Harborville Company provided the following data related to medical costs for providing radiology services and the estimated number of # X-rays processed from January September 2020. Although the clinic manager expected the majority of costs would be fixed, she observed a trend if increasing costs compared with the number of X-rays taken.

  1. Use the high-low method to determine the variable rate for each x-ray and the fixed monthly cost for radiology services.

  1. Determine the cost formula for monthly radiology services.

  1. Compute the estimated cost for radiology services for the next month, assuming 2,625 x-rays.

Month

Total cost

# of X-rays

Jan

100125

2100

Feb

101295

1950

March

131250

2325

Pril

127950

2625

May

132675

2550

June

139950

2775

July 130838 2880

Agust 146633 3075

September 138975 2588

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