Yarrawonga Company Has Provided the Following Information Using the High-Low Method and the Information Provided Above:
A

question 51

Essay

Yarrawonga Company has provided the following information:
$\begin{array}{lrr}\text { Units of Output }&30000 \text { Units } &42000 \text { Units }\\\text { Direct materials } & \$ 180000 & \$ 252000 \\\text { Workers' wages } & 1080000 & 1512000 \\\text { Supervisors' salaries } & 312000 & 312000 \\\text { Equipment depreciation } & 151200 & 151200 \\\text { Maintenance } & 81600 & 110400 \\\text { Utilities } & \underline{384000} & \underline{528000} \\\text { Total } & \$ 2 \underline{188800} & \$ 2865600\end{array}$
Using the high-low method and the information provided above:
a.identify the linear cost function equation;and
b.estimate the total cost at 36 000 units of output.
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Definitions:

Null Hypothesis

An initial assumption made for statistical analysis that suggests no significant effect or relationship exists between variables.

Proportion

A measure that represents a part of a whole as a fraction or percentage.

T Distribution

A probability distribution used in statistics for estimating population parameters when the sample size is small and the population variance is unknown.

Degrees of Freedom

The number of independent values or quantities that can be assigned to a statistical distribution or in the calculation of a statistic.