the following information is available for a companys maintenance cost over the last seven months. using the…

the following information is available for a companys maintenance cost over the last seven months. using the high - low method, the variable component of its maintenance cost is: multiple choice $30.00 per unit $25.00 per unit $22.50 per unit $16.11 per unit

the following information is available for a companys maintenance cost over the last seven months. using the high - low method, the variable component of its maintenance cost is: multiple choice $30.00 per unit $25.00 per unit $22.50 per unit $16.11 per unit

Answer

Explanation:

Step1: Identify high and low activity levels

High: November (480 units, $16,200). Low: December (120 units, $7,200).

Step2: Calculate variable cost per unit

Variable cost per unit = (\frac{\text{Cost at high}-\text{Cost at low}}{\text{Units at high}-\text{Units at low}}=\frac{16200 - 7200}{480 - 120}) [=\frac{9000}{360}= 25]

Answer:

$25.00 per unit