Operating Leverage

1) Snellville Co. reports the following data:

Sales		$775,500
Variable costs		504,100
Contribution margin		$271,400
Fixed costs		205,200
Income from operations		$66,200

Determine Snellville Company's operating leverage. Round your answer to one decimal place.

2) High-Low Method

Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:

Units Produced			Total Costs
4,050			$325,080
1,350			208,980
2,920			309,750

Variable cost: (Round to the nearest dollar.	$
Total fixed cost:	$

a. Determine the variable cost per unit and the total fixed cost.

b. Based on part (a), estimate the total cost for 1,940 units of production.

Total cost for 1,940 units:

$