Answer:
Total cost= $26,668
Explanation:
Giving the following information:
Highest cost= $31,400
Lowest cost= $14,500
Highest activity= 3,700
Lowest activity= 1,200
<u>To calculate the variable and fixed costs, we need to use the following formula:</u>
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Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (31,400 - 14,500) / (3,700 - 1,200)
Variable cost per unit= $6.76
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 31,400 - (6.76*3,700)
Fixed costs= $6,388
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 14,500 - (6.76*1,200)
Fixed costs= $6,388
<u>Now, for 3,000 tests:</u>
Total cost= 6,388 + 6.76*3,000
Total cost= $26,668