Yates Corp Required:
(A

Yates Corp. wants to develop a cost equation for its administrative costs. The controller believes the appropriate cost driver is units produced. Last year's data are presented below:
$\begin{array}{lcc}\text {Month}&\text {Units Produced}&\text {Administrative Costs}\\\text { January } & 32,500 & \$24,288 \\ \text { February } & 37,700 &27,720 \\ \text { March } & 24,700 &17,820 \\\text { April } & 40,300 &30,360 \\ \text { May } & 49,400 &37,290 \\ \text { June } & 42,900 &29,040 \\\text { July } & 53,300 &32,670 \\ \text { Alugust } & 45,500 &30,030 \\ \text { September } & 26,000 &20,460 \\\text { October } & 48,100 & 34,320\\ \text { November } & 61,100 &40,920 \\ \text { December } & 54,600 &36,630 \\\text { Total } & 516,100&\$361,548 \\ \text { Average } & 43,008 &\$30,129\\\end{array}$
Required:
(a.) What is the equation for administrative costs using the high-low method?
(b.) Prepare an estimate of administrative costs for a month when 30,000 units are produced.

Correct Answer:

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(a.)
Variable cost per unit: ($40,920 - ...

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