Hampton Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:
Units Produced Total Costs
8,100 ......... $ 525,000
11,250 ........ 630,000
18,100 ........ 690,000
a. Determine the variable cost per unit and the total fixed cost.
b. Based on part (a), estimate the total cost for 12,000 units of production.