 # The Ramon Company is a manufacturer that is interested in developin...

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Part 1
Step 1: State the formula(s)
In this case, we are supposed to estimate a manufacturing overhead cost formula using the high –low method. The equation for cost volume is:
y = a + bx
where;
a = Total fixed cost
b = Variable cost per unit
However, you need to ascertain the variable cost per unit and the fixed cost per unit before you can show the cost volume equation. The formula for variable cost per unit is:

Variable Cost per Unit = (y2 − y1)/(x2 − x1)
Where;
y2 = total cost at the highest activity level
y1 = total cost at lowest activity level...

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