Question

Units Total Cost Produced July $45,784 20,970 August September 37,280 55,920 41,940 64,075 October 25,630 47,330 November 46,600 86,792 December 44,270 72.230

Find Variable Cost per unit & Fixed Cost

Answer 1

Answer

• Variable Cost and Fixed Cost can be ascertained using the HIGH LOW METHOD

	Months	Units	Cost
High Level	Nov	46,600	$                   86,792.00
Low Level	Jul	20,970	$                   45,784.00
Difference		25,630	$                   41,008.00
A	Difference in Cost		$                   41,008.00
B	Difference in units		25,630
C = A/B	Variable cost per unit		$                           1.600
Working		High Level	Low Level
A	Total Cost	$                 86,792.00	$                   45,784.00
B	Total Units	46600	20970
C	Variable cost per unit	$                           1.60	$                             1.60
D = B x C	Total Variable cost	$                 74,560.00	$                   33,552.00
E = A - D	Total Fixed Cost	$                 12,232.00	$                   12,232.00

• Variable cost = $ 1.60 per unit
• Fixed Cost = $ 12,232