Problem $12\mathrm{.}20$

LO $12-6$

High$-$low method$-$missing amounts The following data have been extracted from the records of Puzzle Inc.:

$\backslash$table$[[,$February,August$],[$Production level, in units,$10,000,20,000],[$Variable costs,$$24,000,$$ $?],[$Fixed costs,?,$36,000],[$Mixed costs,$20,000,?],[$Total costs,$$80,000,$$$118,000]]$

Required:

a$.$ Calculate the missing costs.

b$.$ Calculate the cost formula for mixed cost using the high$-$low method.

c$.$ Calculate the total cost that would be incurred for the production of $16,000$ units.

d$.$ Identify the two key cost behavior assumptions made in the calculation of your answer to $($c$).$