Lark, which uses the high-low method, had total costs of $30,490 at its lowest level of...

Question

Question

Lark, which uses the high-low method, had total costs of $30,490 at its lowest level of activity when 10,500 units were sold.

business accounting

Answer 1

Answer #1

Variable cost per unit

= (Cost at highest activity - Cost at lowest activity) /(Highest activity-Lowest activity)

= (39790-30490)/(16700-10500)

= 1.50 per unit

Fixed cost = Total cost - Total Variable cost

= 39790 - (16700*1.50)

= 14,740

Answer 2

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