Question

July August September October November December Units Produced 18,000 32,000 32,000 36,000 20,000 40,000 38,000 Total Cost $41,500 58,400 6 6,800 40,700 87,700 83,500 x your answer is incorrect. Try again. Compute the variable cost per unit using the high-low method. (Round variable cost per mile to 2 decimal places e.g. 1.25.) Variable cost per unit J 2.14 x Your answer is incorrect. Try again. Compute the fixed cost elements using the high-low method. Fixed costs Fixed costs 2,100 2,100 Click if you would like to Show Work for this question: Open Show Work

Answer 1

Solution

Variable cost per employee

$ 2.10

.

Fixed cost

$ 3,700.00

Working

		Cost	No. of activities
A	High Level	$          87,700.00	40000
B	Low Level	$          41,500.00	18000
C=A-B	Difference	$          46,200.00	$            22,000.00
A	Cost difference	$          46,200.00
B	No. of activities difference	22000
C=A/B	Variable cost per unit	$                     2.10
		High Level	Low Level
A	No. of activities	40000	18000
B	Variable cost per unit	$                2.1000	$                  2.1000
C=AxB	Total Variable cost	$          84,000.00	$            37,800.00
D	Total cost	$          87,700.00	$            41,500.00
E=D-C	Total fixed cost	$             3,700.00	$              3,700.00