Question
Question 2 (Approximate completion time: 25 mins) [CLO 2] Island Production Company has a system of production that produces Product ZMQ in batches. The following
Question 2 (Approximate completion time: 25 mins) [CLO 2] Island Production Company has a system of production that produces Product ZMQ in batches. The following table shows the total cost for producing different batches of the product: Units Total Cost $ 1250 2405 1150 2315 1050 2225 1000 2180 900 2090 800 2000 Required: Use the High Low Method of separating costs to do the following: (a) Find the variable cost per unit. (8 marks) (b) Find the fixed cost present in the above cost structure. (3 marks) (c) Develop the equation/cost function that links total cost to activity. (3 marks) (d) Find the batch size that incurred total cost of $ 2,270. (3 marks) (e) Find the total cost that would be incurred produce batch size of 3,000.
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