1. The following data relating to units shipped and total shipping expense have been assembled by XYZ Company, a wholesaler of large, custom-built air-conditioning units for commercial buildings:

Month	Units Shipped	Total Shipping Expense
January	4	$ 1,800
February	6	$ 2,300
March	4	$ 1,700
April	5	$ 2,000
May	7	$ 2,300
June	8	$ 2,700
July	2	$ 1,200

Required:

1. Using the high-low method, estimate a cost formula for shipping expense.
2. Using the cost formula you derived above, what amount of total shipping expense would you expect to be incurred if 10 units will be shipped?
3. What factors, other than the number of units shipped, do think are likely to affect the company's total shipping expense?

2. Because of Covid-19, some companies around the world have chosen to minimize fixed capacity costs. However, every company has some costs to which it is committed. Distinguish between committed fixed costs and discretionary fixed costs. Give three examples for each.