Question - Soda Company collected the following annual information on total net sales and total operating costs:
|
Year
|
Total Net Sales
|
Total Operating Costs
|
|
2014
|
$8,000,000
|
$4,250,000
|
|
2015
|
$8,500,000
|
$4,400,000
|
In 2016, total net sales are budgeted to be $9,200,000. Using the high-low method, prepare an estimate of total operating costs for 2016, assuming total fixed costs and variable costs as a percentage of total net sales are expected to be the same in 2016 as in 2014 and 2015.