Question

The following information is available regarding the total repair costs of Billy´s Automotive Company for six months of 2016:

	# of Units produced	Total Cost
January	1,600	$ 15,700
February	1,850	$ 17,300
March	1,100	$ 12,550
April	1,350	$ 14,100
May	1,975	$ 18,000
June	2,350	$ 21,050

Instruction: (show your calculations and round to 2 decimal places)

1. Compute the following using the high low method:
2. 1. The variable element of repair cost per unit of production:
3. 2. The fixed element of the monthly total cost:

Use the cost relationship determined in part (A) to estimate the total cost for July 2016, given that the production is scheduled for 2,600 units

Answer 1

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