Arlington Company's highest point of total cost was $61,875 in June. Their point of lowest cost was $52,250 in December. The company makes a single product. Production volume in June was 7,000 units; production volume in December was 12,500 units. How much is the fixed cost per month?

Question

Quizplus · Accepted Answer

C) Calculations:
$61,875 - $52,250 = $9,625
$9,625/(12,500 - 7.000) = $1.75
12,500 × $1.75 = $21,875
$61,875 - $21,875 = $40,000

Arlington Company's Highest Point of Total Cost Was $61,875 in June