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Ingram Co. manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total fixed costs are:

Respuesta :

TomShelby

Answer:

cost = 16x + 28,400

variable 16

fixed 28,400

Explanation:

First Step: we calculate the difference

[tex]\left[\begin{array}{ccc}1High&3,500&84,400\\Low&1,100&46,000\\Diference&2,400&38,400\\\end{array}\right][/tex]

This means 2,400 units generate 38,400 cost so

Variable cost = 38,400/2,400 = 16

then we calculate fixed cost:

84,400 - 16 x 3,500 = fixed cost

84,400 - 56,000 = 28,400

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