Assume a scattergraph shows $500 at no activity and $2,500 at an activity level of 1,000
A)$2.00.
B)$1.40.
C)$2.50.
D)$5.00.

Question

Quizplus · Accepted Answer

The variable cost per unit is calculated by dividing the change in total cost by the change in activity. In this case, the change in total cost is $2,500 - $500 = $2,000, and the change in activity is 1,000 - 0 = 1,000. Therefore, the variable cost per unit is $2,000 / 1,000 = $2.00.

Assume a Scattergraph Shows $500 at No Activity and $2,500