Wheatland Industries_Fixed and Variable cost

10 points

Wheatland Industries has experienced the following electricity costs over recent months:

Cost ($)

Units Produced

28,000

15,300

26,500

13,000

31,400

20,000

27,700

14,200

33,600

19,100

25,800

13,900

Required:

a)  Using the hi/lo method, derive a linear equation describing the behavior of electricity cost

b)  Using the equation from part a, compute the expected electricity cost at 18,000 units of production