Question #3
The Tiger Company collected the following annual information on total net sales and total operating costs:
|
Year |
Total Net Sales |
Total Operating Costs |
|
2014 |
$8,200,000 |
$4,250,000 |
|
2015 |
$8,700,000 |
$4,450,000 |
In 2016, total net sales are budgeted to be $9,400,000. Using the high-low method, prepare an estimate of total operating costs for 2016, assuming total fixed costs and variable costs as a percentage of total net sales are expected to be the same in 2016 as in 2014 and 2015.
