High-Low Method

Shatner 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 3,150, 2100, 4900 Total Costs = $312980, $226800, $352800

a. Determine the variable cost per unit and the total fixed cost. Variable cost: (Round to the nearest dollar.) $ per unit Total fixed cost: $

b. Based on part (a), estimate the total cost for 2,520 units of production. Total cost for 2,520 units: