Exercise $2-16$A $($Algo$)$ Estimating fixed and variable costs using the high$-$low method LO $2-6$

Fanning Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to dedine in the fall and winter months. During year $2,$ the high point in activity occurred in June when it produced $204$ boats at a total cost of $$155,920.$ The low point in production occurred in January when it produced $32$ boats at a total cost of $$51,000.$

Required

a$.$ Use the high$-$low method to estimate the amount of fixed cost incurred each month by Fanning Boat Company.

b$.$ Determine the total estimated cost if $120$ boats are made.

a$.$ Fixed cost

b$.$ Total estimated cost