Selected data about Pitkin Company's manufacturing operations at two levels of activity are presented below:

Required:

Using the high-low method, estimate the cost formula for manufacturing overhead. Assume t both direct material and direct labor are variable costs.

Using your results, estimate the total manufacturing cost at a level of 12,000 units. (8 marks)

10,000 $157,000 $4 $6 15,000 $225,000 $4 Number of Units Produced Total Manufacturing Costs Direct Material Cost per Unit Direct Labour Cost per Unit $6