16 The Wildcat Company has provided the following information:
Units of Output 30,000 Units 42,000 Units
Direct materials $ 180,000 $ 252,000
Workers' wages 1,080,000 1,512,000
Supervisors' salaries 312,000 312,000
Equipment depreciation 151,200 151,200
Maintenance 81,600 110,400
Utilities 384,000 528,000
Total $2,188,800 $2,865,600
Using the high-low method and the information provided above,
a. identify the linear cost function equation and
b. estimate the total cost at 36,000 units of output.
The solution, presented in a Word document, provides detailed ...
The problem deals with utilizing provided cost information for deriving a linear cost equation.
The method used, for deriving the cost equation, is the High-low method.