High-Low Method

Ziegler 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
80,000			$25,100,000
92,000			27,206,000
120,000			32,120,000

a. Determine the variable cost per unit and the total fixed cost.

Variable cost (Round to two decimal places.)	$ per unit
Total fixed cost	$

b. Based on part (a), estimate the total cost for 115,000 units of production.

Total cost for 115,000 units

$