Question: Refer to the data in Exercise 3-2 for the Cool-It Company. Required: 1. Using the high- low method, estimate the fixed shipping expenses per month

Refer to the data in Exercise 3-2 for the Cool-It Company.

Required:
1. Using the high- low method, estimate the fixed shipping expenses per month and the variable cost of shipping each unit.
2. Express the fixed and variable components of total monthly shipping expenses as a cost formula.
3. If Cool-It Company expects to ship 20 units next month, would you feel comfortable using the cost formula from part 2 to estimate total shipping expenses? Why or why not?

Data from in Exercise 3-2.

Cool-It Company is a wholesaler of custom-built air conditioning units for commercial buildings. The data below show the number of units shipped and the total shipping expenses for the past eight months.

Month January February March April May June July August Number of Units

Month January February March April May June July August Number of Units Shipped 3 6 188LSIC 5 7 8 2 Total Shipping Expenses $3,600 $4,600 $3,400 $4,000 $4,600 $5,400 $2,400 $1,200

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\begin{tabular}{|l|c|c|} \hline Manth & NumberofUnitsStipped & TotalShippingExpenses \\ \hline January & 3 & $3,600 \\ \hline February & 6 & $4,600 \\ \hline March & 4 & $3,400 \\ \hline April & 5 &...

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