The State Library of South Australia has incurred the following costs in its Loans Department over the last 6 months of Financial Year 2020-2021:

Month.       Number of Loans        Total Cost       

 Jan                4900                        $ 76,200.00 

Feb                 5300                         $ 87,000.00

 Mar                6200                        $ 90,000.00 

Apr                  4800                        $ 78,100.00 

May                 5050                         $ 80,700.00 

Jun                   3700                        $ 75,000.00 

 

a)Estimate the monthly fixed cost and the variable cost per loan (up to 2 decimal places) using the high-low method. 

 

b)State the cost equation for State Library of South Australia. 

 

c)Estimate the cost for Dec if the forecasted loans is 4850. 

 

d)Cite the advantage(s) of using the High Low Method. 

 

e)Identify possible drawback(s) of using the High Low Method.