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28 October, 16:36

The manufacturing cost of Calico Industries for three months of the year are provided below: Total Cost Production (units) April $119,300 279,500 May 91,200 164,700 June 108,300 247,800 Using the high-low method, the variable cost per unit and the total fixed costs are:

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  1. 28 October, 20:08
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    Variable cost per unit = 0.24

    Total Fixed cost = $52,220

    Explanation:

    The computation of the variable cost per unit and the total fixed costs is given below:-

    Variable cost per unit = (April total cost of May - Production units of May) : (April total cost of June - Production units of June)

    = ($119,300 - 91,200) : ($279,500 - 164,700)

    = $28,100 : $114,800

    = $0.24

    Total Fixed cost = (April total cost of May - (April total cost of June * Variable cost per unit)

    = $119,300 - ($279,500 * 0.24)

    = $119,300 - $67,080

    = $52,220
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