High-Low Method

Liberty Inc. has decided to use the high-low method to estimate costs. The data for various levels of production are as follows:

Units Produced		Total Costs
100,000		$1,800,000
180,000		2,800,000
300,000		4,300,000

a. Determine the variable cost per unit and the fixed cost. Round variable cost per unit to the nearest cent.

Variable cost per unit	$__________
Fixed cost	$__________

b. Based on part (a), estimate the total cost for 260,000 units of production.

$___________