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    High-lost linear cost estimation.

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    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.

    © BrainMass Inc. brainmass.com October 9, 2019, 11:37 pm ad1c9bdddf

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    Solution Summary

    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.