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Question #3 The Dolphin Company collected the following annual information on total net sales and total operating costs: Year Total Net Sales Total Operating Costs

Question #3

The Dolphin Company collected the following annual information on total net sales and total operating costs:

Year

Total Net Sales

Total Operating Costs

2014

$45,000,000

$27,400,000

2015

$48,000,000

$28,000,000

In 2016, total net sales are budgeted to be $50,500,000. Using the high-low method, prepare an estimate of total operating costs for 2016, assuming total fixed costs and variable costs as a percentage of total net sales are expected to be the same in 2016 as in 2014 and 2015.

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