Lennon Services has a customer marketing service that offers Internet marketing services.Services include graphics, hosting and answering customer queries.. The costs associated with this marketing service over the past six months are listed below:
|Month||Marketing service costs||Number of customer queries|
Management at Lennon Services believes that the marketing services costs are a mixed cost and would like to use the high-low method to estimate their future costs using the number of customer queries in any given month as the cost driver.
Which month has the highest volume?
Which month has the lowest volume?
What is the variable cost per unit?
What is the total fixed cost?
Using the format y= ax + b, what is the cost estimation formula for Lennon?
If Lennon expects 19,000 customer queries in August, what are the anticipated costs?