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[Ch5-1] K’s total utility costs during the past year were $1,200 during its highest month and...

[Ch5-1] K’s total utility costs during the past year were $1,200 during its highest month and $800 during its lowest month. These costs corresponded to 22,000 units of production during the high month and 12,000 units during the low month. What is the variable cost per unit using the high-low method?
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Answer #1
Computation of Variable cost per Unit using High Low Method
Variable cost per Unit= ( Cost at Highest Volume- Cost at Lowest Volume)/( Highest olume- Lowest Volume)
=(1200-800)/(22000-12000)= $0.04 per unit
Hence, Variable cost per Unit will be $0.04 per Unit
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