You are provided with the following information for a European company:

Year 1 year 2 year 3

Sales production (units) 134400 142600 151200

Total costs 270000 288144 312180

Cost inflation index 100 107 115

1.Use the high-low method to determine a linear function for total costs per annum (@year1 prices)

2. Using the data above and the function from requirement 1, evaluate the accuracy of the function as a costs prognosis