Mars Production Company makes sveral products and sells them for an avrage price of $75. Mears' accountant is considring two different approaches to estimating the firm's total monthly cost function, 1) account analysis, and 2) high-low. In both cass, she used units of production as the indpendent variable.

For the account analysis approach, she developed the cost function by analyzing each cost item in June, when production was 2,000 units. The following are the results of that analysis:

For the high-low method, she dveloped the cost function using the data from June above and data from August, whn production was 2,350 units and total costs were $38,275.

After developing th two cost functions, the accountant used them to make prdictions for the month of December, when production was expcted to be 2,050 units.

[ROUND UNIT COSTS TO THE NEAREST CENT AND TOTAL COSTS TO THE NEAREST DOLLAR.]

Part A

1. Using account analysis, what was the accountant's stimate of total fixed costs for December? 2. Using account analysis, what was the accountant's stimate of total variable costs for December?

Part B

1. Using the high-low method, what was the accountant's stimate of total fixed costs for December? 2. Using the high-low method, what was the accountant's stimate of variable costs per unit for December?

Cost Item Total Cost Fixed Cost Variable Cost Direct materials $7,000 $0 $7,000 Direct labor $9,600 $0 $9,600 Factory overhead $7,610 $3,010 $4,600 Selling expenses $5,900 $3,700 $2,200 Administrative expenses $3,050 $3,050 $0 Total expenses $33,160 $9,760 $23,400