The phone bill for a company consists of both fixed and variable costs. Refer to the four-month data below and apply the high-low method to answer the question.
-$$\begin{array} { | l | r | r | }
\hline & \text { Minutes } & \text { Total Bill } \
\hline \text { January } & 480 & \$ 4000 \
\hline \text { February } & 200 & \$ 2700 \
\hline \text { March } & 170 & \$ 2640 \
\hline \text { April } & 320 & \$ 2855 \
\hline
\end{array}$$ What is the fixed portion of the total cost? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Question

The phone bill for a company consists of both fixed and variable costs. Refer to the four-month data below and apply the high-low method to answer the question. 
-$$\begin{array} { | l | r | r | } 
\hline & \text { Minutes } & \text { Total Bill } \
\hline \text { January } & 480 & \$ 4000 \
\hline \text { February } & 200 & \$ 2700 \
\hline \text { March } & 170 & \$ 2640 \
\hline \text { April } & 320 & \$ 2855 \
\hline
\end{array}$$ What is the fixed portion of the total cost? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

Quizplus · Accepted Answer

Using the high-low method:
Highest cost: $10,360 in March
Lowest cost: $8,480 in June
Variable cost = Highest cost - Lowest cost = $10,360 - $8,480 = $1,880
Using either one of the months, we can calculate the fixed cost:
Fixed cost = Total cost - Variable cost
Fixed cost = $10,360 - $1,880 = $8,480 - $1,880 = $6,600
Therefore, the fixed portion of the total cost is $1,650 per month ($6,600/4 months).
The closest answer choice to $1,650 is C: $1893.

The Phone Bill for a Company Consists of Both Fixed