Do It! Review 5-2 Westerville Company accumulates the following data concerning

Question

Do It! Review 5-2 Westerville Company accumulates the following data concerning a mixed cost, using units produced as the activity level. March April May June July 9,880$13,976 8,940 13,249 14,726 8.710 12.799 9,430 13,719 10,400 Compute the variable cost per unit using the high-low method. (Round variable cost per unit to 2 decimal places e.g. 12.25.) Variable cost per unit s TO TEXT Compute the fixed cost elements using the high-low method. (Round answwer to o decimal places, e.g. 5,275.) Fixed cost s LINK TO TEXT menPrivacy Policy

Explanation / Answer

1) Variable cost per unit = Change in cost/Change in unit

                                        = (14726-12799)/(10400-8710)

Variable cost per unit = 1.14 per unit

2) Fixed cost = 14726-(10400*1.14) = 2870

3) Total cost on 8400 units = 2870+(8400*1.14) = 12446

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