Compton Corporation is a wholesale distributor of educational CD-ROMs. The company's records indicate the following: Using the high-low method of analysis, what are the company's estimated variable selling and administrative expenses per unit?
A) $0.24
B) $4.17
C) $0.88
D) $0.96

Question

Compton Corporation is a wholesale distributor of educational CD-ROMs. The company's records indicate the following:  Using the high-low method of analysis, what are the company's estimated variable selling and administrative expenses per unit?
A) $0.24 
B) $4.17 
C) $0.88 
D) $0.96

Quizplus · Accepted Answer

11eacbfc_c8ae_1379_8ffe_a57a963b2537_TB7552_00 Variable cost = Change in cost ÷ Change in activity = $12,000 ÷ 50,000 units = $0.24 per unit

Compton Corporation Is a Wholesale Distributor of Educational CD-ROMs