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The Metropolis Health System has a system-wide training course for nurse aides. The course requires a packet of materials that MHS calls the training pack. Due to turnover, and because the course is system-wide, there is a monthly demand for new packs. In addition, the local community college also obtains the training packs used in their credit courses from MHS.
The Community College Education Coordinator needs to know how much of the cost is fixed and how much of the cost is variable for these training packs. She decides to use the high-low method of computation.
Question 1: Using the monthly utilization information presented below, find the fixed and variable portion of costs through the high-low method.
Number of
Month Training Packs Cost
January 1,000 $6,200
February 200 1,820
March 250 2,350
April 400 3,440
May 700 4,900
June 300 2,730
July 150 1,470
August 100 1,010
September 1,100 7,150
October 300 2,850
November 250 2,300
December 100 1,010
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