The Austin Company has estimated costs for the following monthly production levels:

Production volume (units) 1,000 2,000 3,000

Cost A $5,000 $8,000 $11,000

Cost B 10,000 20,000 30,000

Cost C 15,000 15,000 15,000

Cost D 20,000 24,000 28,000

Cost E 25,000 50,000 75,000

Cost F 30,000 30,000 30,000

Cost G 35,000 50,000 65,000

Cost H 40,000 40,000 40,000

Total manufacturing costs $180,000 $237,000 $294,000

Required:

a. Identify each cost as a variable, fixed, or mixed cost.

Cost A ____________________

Cost B ____________________

Cost C ____________________

Cost D ____________________

Cost E ____________________

Cost F ____________________

Cost G ____________________

Cost H ____________________

b. Measure the following equation using the high-low method (hint: use the total manufacturing costs and units from the first and third columns.):

Total manufacturing costs = a + b (units)