Question: Zeta 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.

Zeta 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

45,000 ...... $1,535,000

50,000 ...... 1,650,000

70,000...... 2,110,000

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

b. Based on part (a), estimate the total cost for 60,000 units of production.

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