XYZ Staffing company has the following information available about its employee benefits for its technology division:

year employees benefits cost
2011 191 142975
2010 116 126100
2009 151 129225

1.Using the high-low method, develop a cost-estimating equation for toal annual benefits cost.

2. If projected employees for 2012 are 157, what are theestimated benefits cost for 2012?

3. If XYZ staffing expects to increase is employee level to 350 in 2012 would you expect this cost estimation to prjoect an accurate estimate? Why or why not?

4. If XYZ company changes benefit providers in order to obtain better rates, would the cost estimation equation in part a still work to project the toal cost for 180 employees in 2012? Why or why not?

Please refer homework to the homework help section see the post at the top of this page. We do not provide model answers on this Board

If you want to know how to separate the variable component
divide the movement in cost by the movement in numbers, this will give you the variable unit cost which can then be used to estimate future costs