Assuming that cost behavior did not change over the two-year period,what is the company's annual fixed general,selling,and administrative cost?
A) $6,500
B) $6,000
C) $3,000
D) $2,500

Question

Quizplus · Accepted Answer

Variable cost per unit = Change in costs ÷ Change in activity
Variable cost per unit = ($13,000 - $12,000)÷ (3,500 units - 3,000 units)= $2.00 per unit
Total cost = Variable cost + Fixed cost
Fixed cost = Total cost - Variable cost
Fixed cost = $13,000 - (3,500 units x $2.00 per unit)= $6,000

Assuming That Cost Behavior Did Not Change Over the Two-Year