Pablo was reviewing the water bill for his carwash business and determined that the highest bill,$5,000,occurred in July when 2,200 cars were washed and the lowest bill,$3,200,occurred in February when 1,400 cars were washed.What was the fixed portion of the water bill?

Question

Quizplus · Accepted Answer

D)
Highest cost $5,000 Highest activity 2,200
Lowest cost $3,200 Lowest activity 1,400
Difference $1,800 800
NOW divide the difference in the cost by the difference in the activity equals Variable cost per unit.$1,800/800 = $2.25
Put the numbers into the Cost Equation: $5,000 = $2.25 (2,200)+ f
$50 = f

Pablo Was Reviewing the Water Bill for His Carwash Business