1) Variable cost per unit: $1.20 per unit
Working:
Cost |
Units |
|
High level of activity (20,000 units * $1.38) |
27,600 |
20,000 |
Low level of activity (16,000 units * $1.425) |
22,800 |
16,000 |
Change |
4,800 |
4,000 |
$4800 / 4000 units = $1.20
2) Fixed cost: $3,600
Working:
Total cost at the high level |
27,600 |
Minus: Variable cost (20,000 units * $1.20) |
24,000 |
Fixed cost |
3,600 |
3) Solution: $25,200
Variable cost (18,000 units * $1.20) |
21,600 |
Fixed cost |
3,600 |
Total cost |
25,200 |
1. Mateo Company's average cost per unit is $1.425 at the 16,000-unit level of activity and...
Wilmington Corporation has a total expense per unit of $1.50 at the 15,000 unit level of activity and total expense per unit of $1.45 at the 20,000 unit level of activity. Assume that the relevant range includes all of the activity levels mentioned in this problem. What would be the variable cost per unit for Wilmington Corporation? $0.77 O $1.50 O $1.30 O $1.45
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