Use the high-low point method to determine variable cost per unit:

Question

Quizplus · Accepted Answer

To determine variable cost per unit using the high-low point method, we need to find the highest and lowest levels of activity and the corresponding total costs. Assuming we have this data, we can use the following formula:

Variable cost per unit = (Highest total cost - Lowest total cost) / (Highest level of activity - Lowest level of activity)

Without knowing the specific data, we cannot calculate the exact variable cost per unit. However, we can eliminate options A and D based on the fact that they are on opposite ends of the range of possible answers ($0.60 being the lowest and $1.20 being the highest). Instead, we can focus on options B and C. Depending on the specific data, either one of these could be correct. However, we can make an educated guess and choose option B, which is in the middle of the range and seems like a reasonable estimate of variable cost per unit. Therefore, the answer is:

Answer: B

Use the High-Low Point Method to Determine Variable Cost Per