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Pelicans Ice is a snow cone stand near the local park. To plan for the future, Pelicans Ice wants to determine its cost behav
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Answer #1

Answer : $1600

Calculated as

High point is in May 9000 units cost is $7000

Low point is in March 4000 units cost is $4000

Variable cost per unit = Difference in High and low point cost/Difference in high and low point units

= ($7000-$4000)/(9000-4000)

= 0.60 per unit

Fixed cost = Total cost at 4000 units - Variable cost of 4000 units

= $4000 - 4000 * 0.60

= 4000-2400

= $16000

Hence answer is $1600

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