I'd be grateful if someone could show how to approach this management accounting problem. Thanks in advance.

Linda Nichol is the department heads for the accounting department at a Montreal insurance firm. Linda discovered that there are a number of costs associated with the claims processing. These costs included the salaries of the two paralegals and an accountant; the cost of claims forms, cheques, envelopes, and postage, and depreciation on the office equipment dedicated to alegals' time is spent in the routine processing of uncontested claims, but much time is spent on the claims that have incomplete documentation or are contested. The accountant's time appears to vary with the number of claims processed. Linda was able to separate the costs of processing claims from the costs of running the departments of accounting and human resources. She gathered the data on claims processing cost and the number of claims processed per month for the past six months. These data are as follows: Month February March April May June July Number of Claims Processed 5,700 4,900 6,100 6,500 7,930 7,514 Total Claims Processing Cost $ $34,907 $31,260 $37,950 $38,250 $44,895 $44,955 Required: 1. Using the high-low method calculate the total predicted cost if there were 6,000 claims processed. 2. Suppose that an outside company bids on the claims processing business. The bid price is $5.75 per claim. If Linda expects 75,600 claims next year, should she outsource the claims processing or continue to do it in-house comment briefly