136 points Mountain Dental Services is a specialized dental practice whose only

Question

136 points Mountain Dental Services is a specialized dental practice whose only service is filing cavities. Mountain has recorded the following for the past nine Number of Cavities 5,000 February 5,700 5100 6300 6250 Required 1. Use the high-low method to estimate total faxed cost and variable cost per cavity filed.Round your answers to 2 decimal places Fixed Cost Varable Cost per 2. Using these estimates, calculate Mountain's total cost for filling 575 cavities 5 8 Q W command optio ption command

Explanation / Answer

1) Fixed Cost $       3,800 Variable cost per unit $         4.00 Working: As per high-low cost Method, Variabel cost per unit = (Total cost at highest level-Total cost at lowest level)/(Highest Level-Lowest Level) = (6300-5000)/(625-300) = $         4.00 Now, either at Highest level of Lowest level of 625 units or 300 units Total cost $       6,300 $       5,000 Variable cost $       2,500 $       1,200 (625*4.00) (300*4.00) Fixed Cost $       3,800 $       3,800 Thus, Fixed Cost $       3,800 Variable cost per unit $         4.00 2) Estimated total cost $       6,100 Working: Estimated total cost = Fixed cost+Units *Variable cost per unit = $       3,800 + 575*4.00 = $       3,800 + $       2,300 = $       6,100

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