Valley Dental Services is a specialized dental practice whose only service is fi
ID: 2369405 • Letter: V
Question
Valley Dental Services is a specialized dental practice whose only service is filling cavities. Valley has identified the following monthly costs.
Use the high-low method to estimate the cost formula. Using this formula, calculate Valley's total cost for filling 490 cavities. (Round intermediate calculations to 2 decimal places and final answer to the nearest dollar amount. Due to rounding of Variable cost per unit the answer obtained for Fixed cost per month in High and Low method varies. Omit the "$" sign in your response.)
Month Number of
Cavities Filled Total Cost January 619 $2,640 February 702 2,980 March 504 2,080 April 433 1,930 May 451 2,290 June 294 1,510 July 373 1,810 August 560 2,390 September 574 2,690
Explanation / Answer
Month No. of Cavaties Total Cost
February High 702 $2,980
June Low 294 $1,510
Difference 408 $1,470
Variable cost
per cavity $1,470 / 408 = $3.60
Fixed costs = $2,980 - (702 x $3.60) = $453
Alternatively
Fixed costs = $1,510 - (294 x $3.60) = $452
Total cost for 490 cavities
$453 + (490 x $3.60) = $2,217
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