Problem #9 the f our The phone bill for Laurel Accounting consists of both fixed

Question

Problem #9 the f our The phone bill for Laurel Accounting consists of both fixed and variable costs. Refer to month data below and apply the high-low method to answer the questions below. calculation to two decimal places.) r the questions below. (Round your Minutes Total Bill 480 $3.000 240 $2.675 May une uly160 $2,640 ugust 320 $2,880 a) What is the variable cost per minute? (2.5 Points) b) What is variable cost in total? (2.5 Points) c) What is the fixed cost? (2.5 Points) Problem #10 Neptune Company sold 4,000 units in November at a price of $35 per unit. The variable cost is S22 per unit. The monthly fixed costs are $10,000. What is the operating income earned in November? Use the Contribution Statement format. (5 Points)

Explanation / Answer

1. Variable cost per minute = (2880 - 2640) / (320 - 160)

= $1.5 per minute

2. Total Variable cost = 320 minutes x 1.5

= $480

3. Fixed Cost = 2880 - 480

= $2400

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