Correct answer--------26,400
Working
First High low method will be used to calculate fixed cost in total and variable cost per unit.
Cost | No. of activities | ||
A | High Level | $ 29,000.00* | 20000 |
B | Low Level | $ 22,500.00 | 15000 |
C=A-B | Difference | $ 6,500.00 | $ 5,000.00 |
A | Cost difference | $ 6,500.00 | |
B | No. of activities difference | 5000 | |
C=A/B | Variable cost per unit | $ 1.30 | |
High Level | Low Level | ||
A | No. of activities | 20000 | 15000 |
B | Variable cost per unit | $ 1.3000 | $ 1.3000 |
C=AxB | Total Variable cost | $ 26,000.00 | $ 19,500.00 |
D | Total cost | $ 29,000.00 | $ 22,500.00 |
E=D-C | Total fixed cost | $ 3,000.00 | $ 3,000.00 |
*20000 x 1.45
No of Units | 18000 |
Variable cost | $ 23,400.00 |
Fixed cost | $ 3,000.00 |
Total cost | $ 26,400.00 |
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