Felix&Co. reports the following information about its sales and cost of sales. Draw an estimated line of cost behavior using a scatter diagram, and compute fixed costs and variable costs per unit sold. Then use the high-low method to estimate the fixed and variable components of the cost of sales.
Period | Units Sold | Cost of Sales |
1 | 0 | $2,500 |
2 | 400 | 3,100 |
3 | 800 | 3,700 |
4 | 1,200 | 4,300 |
5 | 1,600 | 4,900 |
6 | 2,000 | 5,500 |
7 | 2,400 | 6,100 |
8 | 2,800 | 6,700 |
9 | 3,200 | 7,300 |
10 | 3,600 | 7,900 |
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