The manufacturing cost of Calico Industries for three months of the year are provided below: Total Cost Production (units) April $121,800 282,100 May 82,500 163,400 June 99,900 235,900 Using the high-low method, the variable cost per unit and the total fixed costs are

Total Cost

Production (units)

April $121,800 282,100

May 82,500 163,400

June 99,900 235,900

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

$0.33 per unit and $28,707

$0.59 per unit and $14,354

$3.30 per unit and $2,871

$5.94 per unit and $2,871

The correct answer is A.

Explanation:

Giving the following information:

April $121,800 282,100

May 82,500 163,400

June 99,900 235,900

To calculate the variable and fixed costs under the high-low method, we need to use the following formulas:

Variable cost per unit = (Highest activity cost - Lowest activity cost) / (Highest activity units - Lowest activity units)

Variable cost per unit = (121,800 - 82,500) / (282,100 - 163,400)

Variable cost per unit = $0.33

Fixed costs = Highest activity cost - (Variable cost per unit * HAU)

Fixed costs = 121,800 - (0.33*282,100)

Fixed costs = $28,707