Question 6

• Time: 10 minutes
• Total: 6 marks

Below are the processing costs of Darnell Products observed over the last 10 months:

Month	Units Produced	Processing Cost
1	7,500	$44,000
2	11,000	60,000
3	14,500	58,550
4	5,500	20,000
5	9,000	47,000
6	8,500	52,000
7	3,500	25,000
8	7,000	41,000
9	11,500	52,000
10	6,000	41,000

1. Use the high low method to determine the variable cost per unit and fixed cost per month. Express your results in the form of a linear equation y = a + bx.
2. Predict the total processing cost if 17,000 units are produced.