Ponszko Nursery used high-low data from June and July to determine its variable cost of $12 per unit.Additional information follows: $$\begin{array} { l c c }
\text { Month } & \text { Units produced } & \text { Total costs } \
\hline \text { June } & 2,000 & \$ 32,000 \
\text { July } & 1,000 & 20,000
\end{array}$$ If Ponszko's produces 2300 units in August how much is its total cost expected to be?

Question

Ponszko Nursery used high-low data from June and July to determine its variable cost of $12 per unit.Additional information follows: $$\begin{array} { l c c } 
\text { Month } & \text { Units produced } & \text { Total costs } \
\hline \text { June } & 2,000 & \$ 32,000 \
\text { July } & 1,000 & 20,000
\end{array}$$ If Ponszko's produces 2300 units in August how much is its total cost expected to be?

Quizplus · Accepted Answer

The fixed cost is $8,000 (calculated from either month: $32,000 - (2,000 units * $12) or $20,000 - (1,000 units * $12)). For 2,300 units, the total cost is $8,000 + (2,300 * $12) = $35,600.

Ponszko Nursery Used High-Low Data from June and July to Determine