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10 January, 17:30

Blossom Corp. has collected the following data concerning its maintenance costs for the past 6 months.

Units Produced Total Cost

July 18,070 $41,663

August 32,128 48,192

September 36,144 55,220

October 22,088 44,580

November 40,160 74,798

December 38,152 62.248

Compute the variable cost per unit using the high-low method. (Round answer to 2 decimal places, e. g. 2.25.)

Variable cost per unit $ e

Compute the fixed cost elements using the high-low method. Fixed costs $

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Answers (1)
  1. 10 January, 18:47
    0
    Variable cost per unit = $1.5 per unit

    Fixed cost = $14,558

    Explanation:

    Variable cost per unit

    = cost at high activity - cost at low activity/High activity - low activity

    =$ (74,798 - $41,663) / (40,160 - 18,070) units

    = $1.5 per unit

    Fixed cost

    Total fixed cost = cost at high activity - (vc per unit * high activity)

    = 74,798 - (1.5 * 40,160)

    = $14,558

    Variable cost per unit = $1.5 per unit

    Fixed cost = $14,558
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