Question: 1. Which of the following methods is likely to yield the most precise estimated line of cost behavior?
(a) High-low,
(b) least-squares regression, or
(c) scatter diagram.
2. Cinquante Company expects to sell 100,000 units of its product next year, which would generate total sales of $12 million. Management predicts that pretax net income for next year will be $3,000,000 and that the contribution margin per unit will be $40. Use this information to compute next year's total expected
(a) variable costs and
(b) fixed costs.