This Question: 3 pts 30127 (2 complete) This Test: 100 pts p The phone bail for

Question

This Question: 3 pts 30127 (2 complete) This Test: 100 pts p The phone bail for a company consists of both fixed and variable costs. Refer to the four -month data below and apply the high - low method to answer the question January February March April Minutes Total Bil 480 $4,000 230 $2,675 180 $2,625 300 $2,825 What is the fixed portion of the total cost? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dolar.) OA. $1,802 0 B. $2,625 O c. $2,198 O D. $1,375

Explanation / Answer

Variable cost per minute=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)

=(4000-2625)/(480-180)=$4.58(Approx)

Hence Fixed cost=4000-(4.58*480)=$1802(A).

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