EA11.

LO 2.3Markson and Sons leases a copy machine with terms that include a fixed fee each month plus a charge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?

Question

Business

Elizabeth Peterson

25 July, 07:57

EA11.

LO 2.3Markson and Sons leases a copy machine with terms that include a fixed fee each month plus a charge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?

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Answers (1)

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Mylee Young · Answer 1

0.04$ per copy

Explanation:

The high - low cost method for calculating variable cost per unit can be calculated through the following formula:

Variable cost per unit=Total cost at highest activity-Total cost at lowest activity/Number of units at highest activity-Number of units at lowest activity.

Variable cost per unit=480-320/9000-5000

=0.04$ per copy