The Managers of the Production Department Have Decided to Use

Essay

The managers of the production department have decided to use the production levels of 2012 and 2018 as examples of the highest and lowest years of operating levels.Data for those years are as follows:
$$\begin{array} { c c c } \text { Year } & \text { Chemicals Used } & \text { Overhead Costs } \\2012 & 200000 \text { litres } & \$ 135000 \\2018 & 150000 \text { litres } & \$ 105000\end{array}$$
Required:
What is the cost estimating equation for the department if litres of chemicals are used as the cost driver?
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