Question 5: Cost structure estimation activity volume month total costs in units Oct 85 $5,920 Nov 70 $6,100 Dec 110 $7,300 a) Which cost structure estimation method should we use? account classification method O high-low method b) To identify the low and high points, we should look for O lowest/highest activity O lowest/highest costs c) Estimate the cost structure parameters: total FC= unit VC= Write down the total cost equation TC= + * volume d) Predict the total costs of producing 90 units: TC= e) Can we use the estimates from (c) to predict costs at volume of 5,000 units? ONO: 5,000 units is outside the relevant range (the normal range of activity is around 70-110 units).