Westerville Company accumulates the following data concerning a mixed cost, usin

Question

Westerville Company accumulates the following data concerning a mixed cost, using units produced as the activity level.

Units Produced

Total Cost

17,082

A. Compute the variable cost per unit using the high-low method. (Round variable cost per unit to 2 decimal places e.g. 12.25.)
B. Compute the fixed cost elements using the high-low method. (Round answer to 0 decimal places, e.g. 5,275.)

C. Estimate the total cost if the company produces 8,400 units. (Round answer to 0 decimal places, e.g. 5,275.)

Units Produced

Total Cost

March 9,990 $18,220 April 8,870 16,652 May 10,500 19,020 June 8,700 16,212 July 9,350

17,082

Explanation / Answer

A. Variable cost per unit = ($19,020 - $16,212) / (10,500 - 8,700) = $1.56

B. Fixed cost = $16,212 - (8,700 × $1.56) = $2,640

C. Total cost = (8,400 × $1.56) + $2,640 = $15,744

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