Assume a scattergraph shows $500 at no activity and $2,500 at an activity level of 1,000 units.The variable cost per unit is
A)$2.00.
B)$1.40.
C)$2.50.
D)$5.00.

Question

Quizplus · Accepted Answer

The variable cost per unit can be calculated by finding the slope of the line connecting the two points on the scattergraph. The slope is calculated as (change in cost) / (change in activity level) = ($2,500 - $500) / (1,000 units - 0 units) = $2,000 / 1,000 units = $2.00 per unit.

Assume a Scattergraph Shows $500 at No Activity and $2,500