The following information is available for a company's cost of sales over the last five months. Month Units sold Cost of sales January 400 $ 31,000 February 800 $ 37,000 March 1,600 $ 49,000 April 2,400 $ 61,000 Using the high-low method, the estimated variable cost of sales per unit sold is:

Question

Business

Lowery

3 July, 06:49

The following information is available for a company's cost of sales over the last five months. Month Units sold Cost of sales January 400 $ 31,000 February 800 $ 37,000 March 1,600 $ 49,000 April 2,400 $ 61,000 Using the high-low method, the estimated variable cost of sales per unit sold is:

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Answers (1)

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Allison Shepard · Answer 1

Cost of Sales $15 Per Unit

Explanation:

Using high and low method Variable cost of product can be find using the formula below

Variable cost per unit = (total cost at high level - total cost at low level) / (total units at high level - total Units at low level)

Variable cost Per Unit = ($61000 - $31000) / (2400 - 400) = $30000/2000

Variable cost Per Unit = $15 Per Unit