A clothing manufacturer incurred the following factory maintenance costs: 2,100 units produced with maintenance cost of $61,500, and 750 units produced with maintenance cost of $41,250. How much of the maintenance cost is made up of fixed cost? (Use the high-low method.)

Question

Quizplus · Accepted Answer

The high-low method calculates the variable cost per unit first: ($61,500 - $41,250) / (2,100 - 750) = $15 per unit. Then, using either high or low point, calculate fixed cost: $61,500 - ($15 * 2,100) = $30,000.

A Clothing Manufacturer Incurred the Following Factory Maintenance Costs: 2,100