The following data pertains to activity and the cost of cleaning and maintenance for two recent months: The best estimate of the total month 1 variable cost for cleaning and maintenance is:
A)$300
B)$500
C)$800
D)$100

Question

The following data pertains to activity and the cost of cleaning and maintenance for two recent months:  The best estimate of the total month 1 variable cost for cleaning and maintenance is: 
A)$300 
B)$500 
C)$800 
D)$100

Quizplus · Accepted Answer

Cleaning and maintenance
Variable cost per unit = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($1,100 - $900)F1F1F1S1F1F1F10 (2,500 units - 2,000 units)
= $200 F1F1F1S1F1F1F10 500 units
= $0.40 per unit
Total variable cost at 22,000 units = 2,000 units F1F1F1S1F1F1F10 $0.40 per unit
= $800

The Following Data Pertains to Activity and the Cost of Cleaning