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Problem - Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:
Units Produced
Total Costs
80,000
$25,100,000
92,000
27,206,000
120,000
32,120,000
Required -
a. Determine the variable cost per unit and the total fixed cost.
b. Based on part (a), estimate the total cost for 115,000 units of production.
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