3. Month Total Maintenance Cost Production Volume (units) January $1,880 1,750 u

Question

3.

Month                  Total Maintenance Cost                                Production Volume (units)

January                                $1,880                                                   1,750 units

February $1,800                                                   1,500 units

March $2,200                                                   2,500 units

April $2,120                                                   2,250 units

May $2,300                                                   2,750 units

Using the high-low method, the variable rate for maintenance is:

a)            $0.40

b)            $0.80

c)            $1.20

d)            $2.50

Explanation / Answer

variable cost per unit = (2300-1800)/(2750-1500) = .4 per unit

Option A)

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