Use the following data for the 4th quarter of 2009: month activity volume (#units) total costs Oct 90 $5,025 Nov 65 $5,175 Dec 100 $6,400 Required: a) Estimate fixed costs and unit variable costs using the high-low method. (hint: should you use the observations with the highest/lowest activity, or highest/lowest costs?) FC= unit VC= b) Based on the estimates from (a), what is the cost of producing 87 units? c) Explain why you cannot use the estimates from (a) to predict costs at 5,000 units:
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Use the following data for the 4th quarter of 2009: month activity volume (#units) total costs Oct 90 $5,025 Nov 65 $5,175 Dec 100 $6,400 Required:
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