Gabel Industries Has Collected the Following Data in Order to Analyze

question 146

Essay

Gabel Industries has collected the following data in order to analyze the behavior of their costs: $\begin{array}{|c|c|c|}\hline \text { Month } & \text { Units Produced } & \text { Total Cost } \\\hline \text { January } & 8,750 & \$ 40,500 \\\hline \text { February } & 13.750 & \$ 41,500 \\\hline \text { March } & 12,500 & \$ 45,000 \\\hline \text { April } & 17,500 & \$ 41,500 \\\hline \text { May } & 23,750 & \$ 45,500 \\\hline \text { June } & 11,500 & \$ 38,500 \\\hline\end{array}$
(a) Using the high-low method, calculate the variable cost per unit and the estimated fixed costs.
(b) Using the resulting relationship, predict the costs if they produce 18,500 units in a future period.

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Definitions:

Unconditioned Stimuli

Stimuli that naturally and automatically trigger a response without any prior learning.

Conditioned Stimuli

Stimuli that have become associated with a particular response through conditioning, typically in the context of classical conditioning.

Sign-Stimuli

External sensory cues that trigger a specific, often instinctual, behavior in an organism.

Classical Conditioning

A learning process that involves creating associations between a naturally occurring stimulus and a previously neutral stimulus.