Problem:
McNeil uses the high-low method of estimating costs. McNeil had total costs of $58,000 at its lowest level of activity, when 8,000 units were sold. When, at its highest level of activity, sales equaled 12,000 units, total costs were $76,000.
Required:
Question: What would McNeil estimate its total cost to be if sales equaled 8,100 units?
- $50,000
- $58,450
- $80,000
- $36,450
Note: Please show how to work it out.