Answer:
Total cost formula= 3,510 + 4.911*x
x= Number of instruments
Explanation:
<u>To calculate the variable and fixed costs, we will use the high-low method:</u>
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (10,012 - 6,574) / (1,324 - 624)
Variable cost per unit= $4.911
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 10,012 - (4.911*1,324)
Fixed costs= $3,510
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 6,574 - (4.911*624)
Fixed costs= $3,510
Total cost formula= 3,510 + 4.911*x
x= Number of instruments
For 1,192 instruments:
Total cos= 3,510 + 4.911*1,192
Total cost= $9,363.9
