The Main Answer is 1) The variable cost per unit = $60,450 / 1,500
= $40.30
The total fixed cost = $195,510 - ($40.30 x 4,100)
= $30,280
2) Expected maintenance costs for October $171,330
1) Number of tests Total costs
High - August 4,100 $195,510
Low - February 2,600 $135,060
Difference 1,500 $60,450
The variable cost per unit = $60,450 / 1,500
= $40.30
The total fixed cost = $195,510 - ($40.30 x 4,100)
= $30,280
The cost function is: C(x)= FC + V(x)
Total cost for x tests = $30,280 + $40.30x
2) The expected maintenance cost will be:
Fixed cost $30,280
Variable cost
3,500 x $40.30 141,050
Expected maintenance costs for October $171,330
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