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15 September, 17:15

The following information is available for electricity costs for the last six months of the year: Month Production Volume Electricity Costs February 1,000 $1,700 March 2,200 4,000 April 2,000 3,200 May 1,630 3,100 June 1,240 2,600 July 1,340 3,020 Using the high-low method, what is the estimated variable cost per unit of production? (Round your answer to two decimal places.) a. 1.92 b. 1.37 c. 1.75 d. 1.53

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  1. 15 September, 17:41
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    The correct answer is A.

    Explanation:

    Giving the following information:

    February 1,000 $1,700

    March 2,200 $4,000

    April 2,000 $3,200

    May 1,630 $3,100

    June 1,240 $2,600

    July 1,340 $3,020

    Variable cost per unit = (Highest activity cost - Lowest activity cost) / (highest activity units - Lowest activity units)

    Variable cost per unit = (4,000 - 1,700) / (2,200 - 1,000) = $1.92
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