Question: 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.

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

80,000............................$25,100,000

92,000..............................27,206,000

120,000............................32,120,000

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

B. Based on part (A), estimate the total cost for 115,000 units of production.

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