Estimate fixed costs and unit variable costs

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Reference no: EM131812259

Use the following data for the 4th quarter of 2009:

month activity volume
(#units)
total costs
Oct 90 $6,695
Nov 75 $6,850
Dec 105 $8,350

Required:

a) Estimate fixed costs and unit variable costs using the high-low method. (hint: should you use the observations with the highest/lowest activity, or highest/lowest costs?)

FC=

unit VC=

b) Based on the estimates from (a), what is the cost of producing 97 units?

c) Explain why you cannot use the estimates from (a) to predict costs at 5,000 units:

Reference no: EM131812259

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