High-Low Method

Liberty Inc. has decided to use the high-low method to estimate costs. The data for various levels of production are as follows:

Units Produced Total Costs

5,610 $425,040

4,200 356,120

2,310 273,240

a.Determine thevariable costper unit and thefixed cost.

Variable cost per unit

$_______________

Fixed cost

$_______________

b.Based on part (a), estimate the total cost for 2,850 units of production.

$__________________