Question

EA11.

LO 2.3Markson and Sons leases a copy machine with terms that include a fixed fee each month plus a charge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?

Answer 1

0.04$ per copy

Step-by-step explanation:

The high- low cost method for calculating variable cost per unit can be calculated through the following formula:

Variable cost per unit=Total cost at highest activity-Total cost at lowest activity/Number of units at highest activity-Number of units at lowest activity.

Variable cost per unit=480-320/9000-5000

=0.04$ per copy