Mountain Dental Services is a specialized dental practice whose only service is
ID: 2535455 • Letter: M
Question
Mountain Dental Services is a specialized dental practice whose only service is filling cavities. Mountain has recorded the following for the past nine months: Month January February March April May June July August Number of Cavities Filled 575 375 600 300 550 450 700 475 500 Total Cost 6,350 5,200 6,250 5,150 6,000 5,650 6,350 5,850 5,850 Required 1. Use the high-low method to estimate total fixed cost and variable cost per cavity filled. (Round your answers to 2 decimal places.) Fixed Cost Variable Cost per Unit 2. Using these estimates, calculate Mountain's total cost for filling 650 cavities. Estimated Total CostExplanation / Answer
Answers
Cost
No. of cavities
A
High Level
$ 6,350.00
700
B
Low Level
$ 5,150.00
300
C=A-B
Difference
$ 1,200.00
400
A
Cost difference
$ 1,200.00
B
No. of cavities difference
400
C=A/B
Variable cost per unit
$ 3.00
High Level
Low Level
A
No. of cavities
700
300
B
Variable cost per unit
$ 3.00
$ 3.00
C=AxB
Total Variable cost
$ 2,100.00
$ 900.00
D
Total cost
$ 6,350.00
$ 5,150.00
E=D-C
Total fixed cost
$ 4,250.00
$ 4,250.00
Fixed Cost = $4,250
Variable cost per unit = $3 per unit.
= 4250(fixed cost) + (650 x 3)
=4250 + 1950
= $ 6,200
Cost of 650 cavities = $ 6,200
Cost
No. of cavities
A
High Level
$ 6,350.00
700
B
Low Level
$ 5,150.00
300
C=A-B
Difference
$ 1,200.00
400
A
Cost difference
$ 1,200.00
B
No. of cavities difference
400
C=A/B
Variable cost per unit
$ 3.00
High Level
Low Level
A
No. of cavities
700
300
B
Variable cost per unit
$ 3.00
$ 3.00
C=AxB
Total Variable cost
$ 2,100.00
$ 900.00
D
Total cost
$ 6,350.00
$ 5,150.00
E=D-C
Total fixed cost
$ 4,250.00
$ 4,250.00
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