Problem

Felix&Co. reports the following information about its sales and cost of sales. Draw an...

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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