Question
JT Media Ltd produces magazines for sale in gyms around the country. The following data is available for the production output and printing costs for
JT Media Ltd produces magazines for sale in gyms around the country. The following data is available for the production output and printing costs for the past 12 months:
Production Printing costs
January 28,501 $5,314
February 26,362 $5,000
March 25,554 $6,205
April 29,164 $6,923
May 25,685 $5,664
June 28,185 $6,181
July 29,589 $6,600
August 31,796 $7,602
September 25,315 $5,444
October 29,733 $7,109
November 31,478 $6,341
December 32,649 $6,369
I have used high low method to figure out the printing cost equation. The equation is Y = 2124.63 + 0.13X
I'm not sure how to answer below question.
Q. If you are told that the relevant range for JT Media Ltd is 24,000 to 36,000 units, what does this mean, and why is it important?
(The sample's hints says that answer should provide a definition of what relevant range is and should indicate this is where the linear assumption holds for either FC, VC or mixed cost and indicate that this is important as outside of these ranges the cost equation won't)
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