Trish's Quilt Connection is an on-line company specializing in high-quality quilt frames and accessories.Trish does not charge customers shipping charges for quilt frame orders.She has provided the following information; $\begin{array}{lcr}
\text { Month } & \text { Quilt Frames Sold } & \text { Shipping Costs } \
\text { January } & 1,075 & \$ 8,800 \
\text { February } & 780 & \$ 8,000 \
\text { March } & 1,150 & \$ 9,000 \
\text { April } & 1,280 & \$ 10,000
\end{array}$ Using the high-low method, estimate Trish's total variable and fixed costs are at if she sells 1,280 frames:
A)Total variable cost=$5,120; Total Fixed Cost $4,880
B)Total variable cost=$320; Total Fixed Cost $9,680
C)Total variable cost=$10,000; Total Fixed Cost $0
D)Total variable cost=$2,000; Total Fixed Cost $8,000
E)Total variable cost=$7,500; Total Fixed Cost $500

Question

Quizplus · Accepted Answer

The high-low method involves identifying the months with the highest and lowest activity levels (in this case, April with 1,280 frames and February with 780 frames) and using the formula to calculate the variable cost per unit and the fixed cost. The variable cost per unit is calculated as the difference in costs divided by the difference in activity levels. Then, the total variable cost at the high activity level is calculated by multiplying the variable cost per unit by the number of units at that level. The fixed cost is found by subtracting the total variable cost from the total cost at either the high or low activity level.

Trish's Quilt Connection Is an On-Line Company Specializing in High-Quality