Peterson Company incurred the following high and low maintenance costs totals during 2008: $370,000 at 20,000 units of activity during March and $274,000 at 12,000 units during August.
Answer parts (a) through (b) below, presenting carefully labeled supporting calculations in all cases.
(a) Use the high-low method to compute the variable cost per unit and the total fixed cost element of the mixed cost component.
(b) Based on the above analysis; calculate the total variable and fixed costs for the month of May when activity is 21,000 units.