The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total...
The manufacturing costs of Ackerman Industries for the first three months of the year follow:
| Total Costs | Units Produced | |||
| January | $196,560 | 1,690 | units | |
| February | 286,320 | 2,690 | ||
| March | 305,760 | 4,290 | ||
Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar.
| a. Variable cost per unit | $ |
| b. Total fixed cost |
Homework Answers
Variable cost per unit=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)
=(305,760-196,560)/(4,290-1,690)
=$42 per unit
Total fixed cost=305,760-(4,290*42)=$125580
| a. Variable cost per unit | $42 per unit |
| b.Total fixed cost | $125580 |
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