Question

The manager of the main laboratory facility at CenterHealth Center is interested in being able to predict the overhead costs each month for the lab. The manager believes that total overhead varies with the number of lab tests performed but that some costs remain the same each month regardless of the number of lab tests performed. The lab manager collected the following data for the first seven months of the year. Click the icon to view the data.) Use the high-low method to determine the laboratory's cost equation for total laboratory overhead. Use your results to predict total laboratory overhead if 3,500 Inb tests are performed next month. Let's begin by determining the formula that is used to calculate the variable cost (slope). Change in cont Change in volume Variable cost (slope) outp regre llows: Now determine the formula that is used to calculate the fixed cost component Total operating cost - Total variable cost F ixed cost Use the high low method to determine CenterHealth's operating cost equation (Round the variable cost to the nearest cont.) yes 1.95 +5 21490

keeps telling me its wrong

Answer 1

Statement showing Computations
Particulars	Amount
Cost at highest level of activity	28,500.00
Cost at Lowest level of activity	20,900.00
Highest level of activity	3,800.00
Lowest Level of activity	1,800.00
a)
Variable cost per unit = (28,500 - 20,900)/(3800 -1800)
Variable cost per unit = 7600/2000
Variable cost per unit = $3.8
b)
Total cost - Total variable costs =Fixed costs
Fixed Costs = 28,500 - 3800*3.8
Fixed Costs = $14,060
c) Y = 3.80x + 14,060