Problem:
The Wildcat Company has provided the following information:
Units of Output 30,000 Units 42,000 Units
Direct materials $ 180,000 $ 252,000
Workers' wages 1,080,000 1,512,000
Supervisors' salaries 312,000 312,000
Equipment depreciation 151,200 151,200
Maintenance 81,600 110,400
Utilities 384,000 528,000
Total $2,188,800 $2,865,600
Using the high-low method and the information provided above,
a. Identify the linear cost function equation and
b. Estimate the total cost at 36,000 units of output.