Question

Ch. 5 Homework Seved 5 Mountain Dental Services is a specialized dental practice whose only service is filling cavities. Mountain has recorded the following for the past nine months: 0.33 points Month January February March April May June July August September Number of cavities Filled Total Cost 400 $5,250 500 5,850 675 6,500 525 5,650 700 5,900 425 5,800 600 5,750 300 5,400 450 5,250 eBook Hint Print Required: 1. Use the high-low method to estimate total fixed cost and variable cost per cavity filled. 2. Using these estimates, calculate Mountain's total cost for filling 800 cavities. References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Use the high-low method to estimate total fixed cost and variable cost per cavity filled. (Round your Variable cost per unit to 2 decimal places.) Fixed Cost Variable Cost per cavity filled Required 2 > H 1 Neyt

Answer 1

As per high low method, Variable cost per cavity filled = (Cost at highest level – cost at lowest level)/Difference in number of cavities

= (5900-5400)/(700-300)

= $1.25 per cavity filled

Fixed cost = Total cost – variable cost

= 5900 – 700*1.25 = $5,025

Total cost of 800 cavities = 5025 + 1.25*800 = $6,025