Rhetorix, Inc. produces stereo speakers. Each unit (a pair of speakers) sells for $900.Below is information on production/sales and costs for 2010.

Required
a. Use the high-low method to identify the fixed and variable cost components for both production costs and selling and administrative costs.
b. The company estimates that production and sales in 2011 will be 1,550 units. Based on this estimate, forecast income before taxes for2011.

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Production and Sales in Units 105 Selling and Admin Costs Production Costs January February March April May June Lu August September October November December 97 106 115 125 128 132 138 126 124 108 1,421 $88,860 97,600 83,007 89,600 96,200 103,500 105,670 108,550 112,978 104,200 102,750 91,050 1,183,965 5833.19141 $23,570 25,200 22,495 23,720 24,950 26,250 26,690 27,200 28,030 26,400 26,150 23,990 304,645 $214.38776 Total Average cost per unit