Question

The manufacturing cost of Calico Industries for three months of the year are provided below:

	Total Cost	Production (units)
April	$120,000	280,000
May	74,000	165,000
June	90,900	230,000

Using the high-low method, the variable cost per unit and the total fixed costs are

a. $0.40 per unit and $8,000

b. $4.00 per unit and $800

c. $0.78 per unit and $4,000

d. $7.80 per unit and $4,000

Answer 1

You fivst subtvact the Jow cost drivey (produtio in units and ts total cost vom high cost driver High 120,000 $ 4,000 2 80,00 0 its 65,000 UntS Low $46,000 115,000 Vauable cost rer unit: $16,000 unt $ 0t0 Variable cost er 5000 Total fixed costs (2S0,000 x 0.4 Total tost variable cosd 120,000 $120,000 12,000 8000