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6. Supply costs at Lattea Corporation's chain of gyms are listed below: Client-Visits Supply Cost   March...

6.

Supply costs at Lattea Corporation's chain of gyms are listed below:

Client-Visits Supply Cost
  March 11,668      $28,582     
  April 11,464      $28,416     
  May 11,996      $28,840     
  June 14,100      $28,934     
  July 11,728      $28,643     
  August 11,214      $28,242     
  September 12,008      $28,841     
  October 11,699      $28,599     
  November 11,847      $28,724     

Management believes that supply cost is a mixed cost that depends on client-visits. Use the high-low method to estimate the variable and fixed components of this cost, Compute the variable component first, rounding off to the nearest whole cent. Then compute the fixed component, rounding off to the nearest whole dollar. Those estimates would be closest to: (Round your Variable cost per unit to 2 decimal places.)
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Answer #1
high-low method
Variable cost per unit = (High supply cost - Low supply cost)/(High Client-Visits - Low Client-Visits)
=($28934-28242)/(14100-11214)
=$0.24 per client visit
Fixed cost = $28934 - (14100*0.24)
=$25550
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