Question 1 Markowis Corp. has collected the following data concerning its mainte

Question

Question 1 Markowis Corp. has collected the following data concerning its maintenance costs for the past 6 months. Units Produced Total Cost July 19,152 $38,304 August 34,048 51,072 September 38,304 58,520 October 23,408 40,432 November 42,560 79,268 December 40,432 65,968 Compute the variable cost per unit using the high-low method. (Round variable cost per mile to 2 decimal places e.g. 1.25.) Variable cost per unit $ LINK TO TEXT Compute the fixed cost elements using the high-low method. Fixed costs $

Explanation / Answer

Months Units produced Total cost July 19152 38304 August 34048 51072 September 38304 58520 October 23408 40432 November 42560 79268 December 40432 65968 Ans.1 Variable cost per unit = (Highest cost - Lowest cost) / (Highest units - Lowest units) (79268 - 38304) / (42560 - 19152) 40964 / 23408 1.75 Ans.2 Fixed cost element 4788 (Calculated in the following ans.3) Ans.3 Activity level High Low Total cost 79268 38304 Less: Variable costs 42560 * 1.75 74480 19152 * 1.75 33516 Total Fixed costs 4788 4788

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