Question: Analyze cost behavior and prepare a cost function. Activity Level Total Costs ($) 1,000 units $10,000 2,000 units $15,000 3,000 units $20,000 Requirements: Determine the

Analyze cost behavior and prepare a cost function.

Activity Level

Total Costs ($)

1,000 units

$10,000

2,000 units

$15,000

3,000 units

$20,000

Requirements:

Determine the fixed and variable components of the cost.

Prepare a cost function using the high-low method.

Forecast total costs at different activity levels and discuss the accuracy of the cost function.

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