The Bover Company Has Provided the Following Information Using the High-Low Method and the Information Provided Above,
A

question 105

Essay

The Bover Company has provided the following information:
$\begin{array}{lrr}\text { Units of Output } & 33,000 \text { Units } &46,200 \text { Units }\\\text { Direct materials } & \$ 316,800 & \$ 443,520 \\\text { Workers' wages } & 1,188,000 & 1,663,200 \\\text { Supervisors' salaries } & 343,200 & 343,200 \\\text { Equipment depreciation } & 166,320 & 166,320 \\\text { Maintenance } & 89,760 & 121,440 \\\text { Utilities } & 422,400 & 580,800 \\\text { Total } & \$ 2,526,480 & \$ 3,318,480\end{array}$ Using the high-low method and the information provided above,
a.identify the linear cost function equation and
b.estimate the total cost at 38,000 units of output.

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Definitions:

Business Entity Concept

The accounting principle that separates the transactions of a business from those of its owners or other businesses.

Financial Statement

A financial statement is a formal record of the financial activities and position of a business, person, or other entity, presenting the results of operations and financial status over a period.

Investing

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Operating

Refers to the day-to-day activities and core functions directly related to a company's primary business operations, such as sales and service delivery.