Problem:
McNeil uses the high-low method of estimating costs. McNeil had total costs of $50,000 at its lowest level of activity, when 5,000 units were sold. When, at its highest level of activity, sales equaled 12,000 units, total costs were $78,000.
Required:
Question: What would McNeil estimate its total cost to be if sales equaled 8,000 units?
Note: Please show how to work it out.