Problem:
Colter Company accumulates the following data concerning a mixed cost, using units produced as the activity level.
|
Units Produced
|
Total Cost
|
|
March
|
10,000
|
$18,000
|
|
April
|
9,000
|
16,650
|
|
May
|
10,500
|
18,750
|
|
June
|
8,800
|
16,200
|
|
July
|
9,500
|
17,100
|
(a) Compute the variable and fixed cost elements using the high-low method.
(b) Estimate the total cost if the company produces 8,500 units.