The Starfish

The Starfish restaurant's customer visits and total expenses over the last seven months were as

follows:

Assuming the number of customer visits is a measure of overall activity of the restaurant,

use the High$-$Low method to determine the cost formula for total expenses.

$7,500+13,500=$$$21,000$

$41,700+15,300=$$$27,000$

Using the cost formula which you derived above, what amount of expenses would you

expect to be incurred at an activity level of $11,500$ customer visits?

$y=0\mathrm{.}60x+$$$7,200$

$=0\mathrm{.}60(11,500)+17,200$

$y=$$$14,100$