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Question - Below are the processing costs of Darnell Products observed over the last 10 months:
Month
Units Produced
Processing Cost
1
7,500
$44,000
2
11,000
60,000
3
14,500
58,550
4
5,500
20,000
5
9,000
47,000
6
8,500
52,000
7
3,500
25,000
8
7,000
41,000
9
11,500
10
6,000
Required -
a. Use the high low method to determine the variable cost per unit and fixed cost per month. Express your results in the form of a linear equation y = a + bx.
b. Predict the total processing cost if 17,000 units are produced.
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