You are provided with the following information for a European company:

Required
1. Use the high-low method to determine a linear function for total costs per annum (at Year 1 prices) from the above data.
2. Using the data above and the function from requirement 1, evaluate the accuracy of the function as a costs prognosis.
3. Forecast the total costs in Year 5 based on a volume of 154.400 units using the function in Requirement 1, and a cost inflation index of 125.8.
4. Selling prices in Year 5 are expected to be 15% higher than those in Year 1, when total sales revenue was €319.872. Draw a profit-volume chart for Year 5, showing sales up to 180,000 units per annum.

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Sales/production (units) Total costs (€) Cost inflation index Year 1 134,400 270,000 100 Year 2 142,600 288,144 107 Year 3 151,200 312,180 115 Year 4 150,200 317,900 120