Question: Alden Co.s monthly sales and cost data for its operating activities of the past year follow. Management wants to use these data to predict future fixed and variable costs.

month	sales	total cost	month	sale	total cost
1	320,000	160,000	7	340000	220000
2	160000	100000	8	280000	160000
3	280000	220000	9	80000	64000
4	200000	100000	10	160000	140000
5	300000	230000	11	100000	100000

6

200000

120000

12

110000

80000

Required

2. Estimate both the variable costs per sales dollar and the total monthly fixed costs using the high-low method.

3. Use the estimated line of cost behavior and results from part 2 to predict future total costs when sales volume is a. 200000 and b. 300000