Total Overhead Costs

Question

X Company has the following data from 2014 and 2015:

                                                                          2014                          2015

                              Total costs                        $281,000                  $436,000

                             Units produced                   35,000                       60,000

Expected production in 2016 is 43,500 units. Using the high-low method with the 2014 and 2015 data to determine the parameters of the cost function, what are estimated total costs in 2016? 

Summary: This question belongs to accounting and discusses about using the high-low method  to determine the parameters of the cost function and to calculate total costs.

Total word count: 22