The manager of the main laboratory facility at MetroFit 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 3,000 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) - X Data Table Now determine the formula that is used to calculate the fixed cost component. Total operating cost Total variable cost Fixed cost Month Number of Lab Tests Performed 2,900 Total Laboratory Overhead Costs Use the high-low method to determine MetroFit's operating cost equation. (Round the variable cost to the nearest cent.) y = X + 2.800 3,300 S25.400 S25.200 S26.000 January ..... February .... March April........ May June ....... 3,600 S30,000 4.300 S29.000 1,800 3,700 $18,500 $26.800 July Print Done