Question

Assume that output was 1,000 units in January and 3,500 units in February, utility cost is a mixed cost, and the fixed cost of utilities was $2,000. What was the variable rate per unit of output for utilities cost?

Answer 1

$0.60

Step-by-step explanation:

Missing Information: Table is missing, hence, attached with the answer.

Variable cost = Total utilities cost - Fixed cost

= $2,600 - $2,000

= $600

Variable rate per unit = Variable cost ÷ No. of units produced

= $600 ÷ 1000

= 0.6

Thus, variable rate per unit of output for utilities cost is $0.60.