Reference no: EM133011671

The State Library of South Australia has incurred the following costs in its Loans Department over the last 6 months of Financial Year 2020-2021.

Month                  Number of Loans                Total Cost
Jan                     4900                           $ 76,200.00
Feb                  5300                             $ 87,000.00
Mar                6200                              $ 90,000.00
Apr               4800                              $ 78,100.00
May               5050                            $ 80,700.00
Jun              3700                               $ 75,000.00

Problem a) Estimate the monthly fixed cost and the variable cost per loan (up to 2 decimal places) using the high-low method.

Problem b) State the cost equation for State Library of South Australia.

Problem c) Estimate the cost for Dec if the forecasted loans is 4850.

Problem d) Cite the advantage(s) of using the High Low Method.

Problem e) Identify possible drawback(s) of using the High Low Method.