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A company has identified that total costs increase by 20% when activity level equals or exceeds...

A company has identified that total costs increase by 20% when activity level equals or exceeds 7,500 units. The variable cost per unit is constant over this range of activity.

The company has identified the following costs at three activity levels,

                                                 Units                            Total Costs

High                                         11,000                         276,000

Middle                                     8,000                           240,000

Low                                          5,000                           180,000

  1. Find the Fixed Cost
  2. Construct the total cost function.
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