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Question
Beard Enterprises has collected the following data in order to analyze the behavior of their costs:
| Month | Units Produced | Total Cost |
| January | 17,500 | $ 20,500 |
| February | 27,500 | $ 21,500 |
| March | 25,000 | $ 25,000 |
| April | 35,000 | $ 21,500 |
| May | 47,500 | $ 25,500 |
| June | 22,500 | $18,500 |
a. Using the high-low method, calculate the variable cost per unit and the estimated fixed costs.
b. Using the resulting relationship, predict the costs if they produce 28,000 units in a future period.
Answer
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