A cost is $11,000 at 1,000 units, $12,000 at 2,000 units, and $13,000 at 3,000 u

Question

1. A cost is $11,000 at 1,000 units, $12,000 at 2,000 units, and $13,000 at 3,000 units. The fixed portion of this cost is Answer
   $ 500.
   $ 1,000.
   $ 2,000.
   $10,000.

1. A cost is $11,000 at 1,000 units, $12,000 at 2,000 units, and $13,000 at 3,000 units. The fixed portion of this cost is Answer
   $ 500.
   $ 1,000.
   $ 2,000.
   $10,000.

A cost is $11,000 at 1,000 units, $12,000 at 2,000 units, and $13,000 at 3,000 units. The fixed portion of this cost is Answer
$ 500.
$ 1,000.
$ 2,000.
$10,000. A cost is $11,000 at 1,000 units, $12,000 at 2,000 units, and $13,000 at 3,000 units. The fixed portion of this cost is A cost is $11,000 at 1,000 units, $12,000 at 2,000 units, and $13,000 at 3,000 units. The fixed portion of this cost is A cost is $11,000 at 1,000 units, $12,000 at 2,000 units, and $13,000 at 3,000 units. The fixed portion of this cost is $ 500. $ 1,000. $ 2,000. $10,000.
$ 500.
$ 1,000.
$ 2,000.
$10,000.

Explanation / Answer

Hi,

Please find the answer as follows:

Using High Low Cost Method Variable Cost = (13000 - 11000)/(3000 - 1000) = 1

Fixed Cost = 13000 (Total Cost at 3000 units) - 3000*1 (Variable Cost at 3000 units) = 10000

Answer is Option D (10000)

Thanks.

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