Mendoza Company's highest point of total cost was $85,000 in June.Their point of lowest cost was $60,000 in January.The company makes a single product.Production volume in June was 14,000 units; production volume in January was 8,000 units.What is the variable cost per unit?

Question

Quizplus · Accepted Answer

C) Variable cost per unit = Change in total cost / Change in volume of activity
Variable cost per unit = (Highest cost - Lowest cost) / (Highest volume - Lowest volume)
Variable cost per unit = ($85,000 - $60,000) / (14,000 - 8,000) = $25,000 / 6,000
Variable cost per unit = $4.17 per unit

Mendoza Company's Highest Point of Total Cost Was $85,000 in June.Their