The manager of the main laboratory facility at CitiFit Center is interested in being able to predict the overhead costs each month for the lab. The manager believes that total overhead varies with the number of lab tests performed but that some costs remain the same each month regardless of the number of lab tests performed. The lab manager collected the following data for the first seven months of the year.

$($Click the icon to view the data.$)$

Use the high$-$low method to determine the laboratory's cost equation for total laboratory overhead. Use your results to predict total laboratory overhead if $3,100$ lab tests are performed next month.

Let's begin by determining the formula that is used to calculate the variable cost $($slope$).$

Change in cost Change in volume Variable cost $($slope$)$

Now determine the formula that is used to calculate the fixed cost component.

$$ Total variable cost $=$ Fixed cost

Use the high$-$low method to determine CitiFit's operating cost equation. $($Round the variable cost to the nearest cent.$)$

$y=x+$

Data table

$\backslash$table$[[$Month$,\backslash$table$[[$Number of Lab$],[$Tests Performed$]],\backslash$table$[[$Total Laboratory$],[$Overhead Costs$]]],[$January $.,2,900,$$$25,400$