High-low methodZiegler Inc. has decided to use the high-low method to estimate the totalcost and the fixed and variable cost components of the total cost. Thedata for various levels of production are as follows: Units Produced Total Costs 80,00092,000120,000 $25,100,00027,206,00032,120,000 A. Determine the variable cost per unit and the total fixed cost.B. Based on part (B), estimate the total cost for 115,000 units ofproduction.
High-low methodZiegler Inc. has decided to use the high-low method to estimate the totalcost and the fixed and variable cost components of the total cost. Thedata for various levels of production are as follows: Units Produced Total Costs 80,00092,000120,000 $25,100,00027,206,00032,120,000 A. Determine the variable cost per unit and the total fixed cost.B. Based on part (B), estimate the total cost for 115,000 units ofproduction.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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High-low method
Ziegler Inc. has decided to use the high-low method to estimate the total
cost and the fixed and variable cost components of the total cost. The
data for various levels of production are as follows:
| Units Produced | Total Costs |
| 80,000 92,000 120,000 |
$25,100,000 27,206,000 32,120,000 |
A. Determine the variable cost per unit and the total fixed cost.
B. Based on part (B), estimate the total cost for 115,000 units of
production.
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