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Estimating variable cost

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The management of JC Auditorium believes that the number of events each month is a measure of activity for total clean-up cost. Shown below are event figures and total clean-up costs for the past four months:

Total

Number of Events Total Cleanup Cost

January 28 $30,900

February 34 $34,200

March 16 $20,700

April 22 $28,200

1. Using the high-low method, estimate the variable cost per event and the total fixed cost per month. (Round off the variable cost per function to the nearest cent and the total fixed cost to the nearest dollar).

2. Using the least-squares regression method, estimate the variable cost per event and the total fixed cost per month. (Round off the variable cost per function to the nearest cent and the total fixed cost to the nearest dollar).

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Solution Summary

The solution explains how to estimate the variable cost using high low method and Least Squares Regression Method

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