The following information is available for electricity costs for the last six months of the year: Month Production Volume Electricity Costs February 1,000 $1,700 March 2,200 4,000 April 2,000 3,200 May 1,630 3,100 June 1,240 2,600 July 1,340 3,020 Using the high-low method, what is the estimated variable cost per unit of production? (Round your answer to two decimal places.) a. 1.92 b. 1.37 c. 1.75 d. 1.53

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Business

London Dawson

24 May, 16:59

The following information is available for electricity costs for the last six months of the year: Month Production Volume Electricity Costs February 1,000 $1,700 March 2,200 4,000 April 2,000 3,200 May 1,630 3,100 June 1,240 2,600 July 1,340 3,020 Using the high-low method, what is the estimated variable cost per unit of production? (Round your answer to two decimal places.) a. 1.92 b. 1.37 c. 1.75 d. 1.53

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Answers (1)

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Juliana Flores · Answer 1

The correct answer is A.

Explanation:

Giving the following information:

February 1,000 $1,700

March 2,200 $4,000

April 2,000 $3,200

May 1,630 $3,100

June 1,240 $2,600

July 1,340 $3,020

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

Variable cost per unit = (4,000 - 1,700) / (2,200 - 1,000) = $1.92