MC Qu. 107 The following information is available ... The following information is available for a company's utility cost for operating its machines over the last four months. Month Machine hours Utility cost January 900 $ 5,450 February 1,800 $ 6,900 March 2,400 $ 8,100 April 600 $ 3,600 Using the high-low method, the estimated variable cost per unit for utilities is: Multiple Choice $6.17. $2.50. $4.22. $6.00. $3.38.

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23 July, 19:37

MC Qu. 107 The following information is available ... The following information is available for a company's utility cost for operating its machines over the last four months. Month Machine hours Utility cost January 900 $ 5,450 February 1,800 $ 6,900 March 2,400 $ 8,100 April 600 $ 3,600 Using the high-low method, the estimated variable cost per unit for utilities is: Multiple Choice $6.17. $2.50. $4.22. $6.00. $3.38.

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Rachael Trevino · Answer 1

Variable cost Per Unit $2.50

Explanation:

Total cost at high activity = $8100

Total Cost at Low activity = $3600

Total Units at high activity = 2400

Total Units at low Activity = 600

Variable Cost Per Unit = (High activity total Cost - Low activity total cost) / (High Activity unit - low activity units)

Variable cost per unit = ($8100 - $3600) / (2400 - 600) = $4500 / 1800 = $2.50