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Problem - Goodwill Co. has the following actual production data for the first four months of the year for the mixed costs incurred:
Month
Cost
Units
July
$7,980
6,500
August
$8,048
6,400
September
$12,960
10,600
October
$17,680
15,000
It uses the high-low method to analyze mixed costs.
Required -
a) What is the variable cost component?
b) What is the fixed cost component?
c) What is the cost function?
d) What is the estimated total cost at an operating level of 10,000 units?
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