You have joined a manufacturing company as its Management Accountant and notice that they are still using average costs to markup and create sell prices but these vary depending on the quantity produced in the preceding months.

You review the cost and volume data (using Machine Hours - MHs as the most appropriatecost driverand have found the following regarding the busiest and quietest months of operation over the past year:

HIGH MONTH TOTAL COST: 693000

LOW MONTH TOTAL COST: 429000

HIGH VOL : 5800

LOW VOL : 3400

You discuss alternative ways of predicting costs with your manager and you have to demonstrate your simple (high-low) method and predict the TOTAL COST if the company were to run 4800 Machine Hours in a month.

Required:

Calculate the TOTAL cost prediction for this company if it worked the number of hours shown and enter you answer below.

NOTE: DONOTdollar signs ($) etc., simply enter the amount. e.g. to enter $1,000 simply enter 1000.