Total Production Costs Number of Boomerangs Produced January $60 50 units February $30 20 units March $20 10 units
Q#1: Using the High-Low Method to analyze the cost and production data in the data table, what is the variable cost for producing each unit? (In this case, one unit is a single boomerang.)
Q#2: What is the total monthly fixed cost of operating Bruce's boomerang production business?
Q#3: Now that we've used the High-Low Method to approximate the variable and fixed cost parameters for this production operation, write the linear equation that describes the behavior of the total costs for this operation. Next, with this modeled relationship (i.e., using the equation just written), if we estimate that for the upcoming month this operation will produce 80 boomerangs, what do we estimate will be the total production expenses that will be incurred?