Question: Keepsake Gifts, Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total

Keepsake Gifts, 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 the highest and lowest levels of production are as follows:

a. Determine the variable cost per unit and the fixed cost.
b. Based on (a), estimate the total cost for 12,000 units ofproduction.

Units Produced Total Costs Highest level Lowest level 15,000 5,000 $432,500 $237,500

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a The fixed cost can be determined by subtracting the estimated total variable cost ... View full answer

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