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29 September, 18:09

Bonita Industries used high-low data from June and July to determine its variable cost of $12 per unit. Additional information follows: Month Units produced Total costs June 2200 $32400 July 600 13200 If Bonita's produces 1300 units in August, how much is its total cost expected to be?

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  1. 29 September, 21:31
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    Total cost = $25,200

    Explanation:

    Giving the following information:

    Unitary variable cost = $12

    Units produced - total cost:

    June: 2,200 - $32,400

    July: 600 - $13,200

    August = 1,600 units

    First, we need to determine the fixed costs:

    Fixed costs = total cost - total variable cost

    June = 32,400 - 12*2,200 = $6,000

    July = 13,200 - 12*600 = $6,000

    Now, we can calculate the total cost for 1,600 units,

    Total cost = 6,000 + 12*1,600 = $25,200
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