Crane Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:
Units Produced ....... Total Costs
10,000 $700,000
15,000 840,000
22,500 920,000
(1) Determine the vraiable cost per unit and the fixed cost.
(2) Based on part 1, estimate the total cost for 14,000 units of production.