Question

Sheridan Gravity Grips produces spike sets for track shoes. CEO Brittany Sheridan has gathered the following information about the company's sales volume and marketing cost for the past six months: Qu Aco with Qu Acco with January February March April May June Sales Volume 65,200 49,200 70,700 75,200 68,200 77.400 Total Marketing Costs $7,267 $6,063 $8.520 $8,635 $8,270 $7.755 Qur Acco Que Acco (a) Vies 5

Answer 1

Highest activity cost = $7,755

Lowest activity cost = $6,063

Highest activity = 77,400

Lowest activity = 49,200

Variable cost per spike set= (Highest activity cost - Lowest activity cost)/(Highest activity - Lowest activity)

= (7,755-6,063)/(77,400-49,200)

= 1,692/28,200

= $0.06 per spike set sold

Variable marketing cost =

$0.06

per spike set sold

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