Determine the fixed component of packaging costs

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Reference no: EM132825616

Question - Martinez and Company is trying to determine the cost behaviour of their packaging costs. The following data are available for the past six months:

Month	Number of packages	Costs Incurred
January	5,000	$4,200
February	3,800	$3,800
March	4,200	$3,855
April	4,800	$4,050
May	5,720	$5,078
June	3,740	$3,791

Required - Use the high-low method to:

a. Determine the variable cost per package.

b. Determine the fixed component of packaging costs.

c. Determine the cost formula for packaging costs.

d. Using the formula from part c what would the total packaging costs be if the company had 4,900 packages?

Reference no: EM132825616

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