The highest value of total cost was $800,000 in June for Horchata Beverages,Inc.Its lowest value of total cost was $510,000 in December.The company makes a single product.The production volume in June and December were 13,000 and 8000 units,respectively.What is the fixed cost per month? (Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar.)
A) $510,000
B) $290,000
C) $46,000
D) $8000

Question

Quizplus · Accepted Answer

Variable cost per unit = Change in total cost / Change in volume of activity
Variable cost per unit = (Highest cost - Lowest cost) / (Highest volume - Lowest volume)
 11ea8873_d51f_f843_bb89_31314aeddc83_TB5026_00 Total costs for June
 11ea8873_d51f_f844_bb89_4d9a3f9169ca_TB5026_00

The Highest Value of Total Cost Was $800,000 in June