Mountain Dental Services is a specialized dental practice whose only service is

Question

Mountain Dental Services is a specialized dental practice whose only service is filling cavities. Mountain has recorded the following for the past nine months: Month January February March April May June July August September Number of Cavities Filled 625 525 475 375 675 500 325 700 450 Total Cost $6,350 5,950 5,650 5,350 6,500 5,700 5,150 6,350 5,450 Required 1. Use the high-low method to estimate total fixed cost and variable cost per cavity filled. (Round your answers to 2 decimal places.) Fixed Cost Variable Cost per Unit 2. Using these estimates, calculate Mountain's total cost for filling 550 cavities Estimated Total Cost

Explanation / Answer

1. Fixed cost= 4110

variable cost= 3.2 per unit

workings:

2.

Number of cavities filled Total cost Highest 700 6350 Lowest 325 5150 Difference 375 1200 Variable cost per unit 1200/375 3.2 Variable cost of filling 325 cavities 325*3.2=        1,040 Fixed cost 5150-1400=        4,110

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