In: Finance
Thomas Train has collected the following information over the last six months.
Month | Units produced | Total costs |
March | 10,000 | $25,600 |
April | 12,000 | 26,200 |
May | 19,600 | 28,000 |
June | 13,000 | 26,450 |
July | 12,000 | 26,000 |
August | 15,000 | 26,500 |
Using the high-low method, what is the variable cost per unit?
Round to two decimal places.
Variable cost per unit=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)
=(28000-25600)/(19600-10,000)
which is equal to
=$0.25 per unit