Chrysntag Company incurred the following costs for the months of January and February.

Assume that output was 1,000 units in January and 3,500 units in February, utility cost is a mixed cost, and the fixed cost of utilities was $2,000.What was the variable rate per unit of output for utilities cost?
A) $0.60
B) $0.40
C) $0.20
D) $0.30

Question

Chrysntag Company incurred the following costs for the months of January and February. 
 
 Assume that output was 1,000 units in January and 3,500 units in February, utility cost is a mixed cost, and the fixed cost of utilities was $2,000.What was the variable rate per unit of output for utilities cost?
A) $0.60 
B) $0.40 
C) $0.20 
D) $0.30

Quizplus · Accepted Answer

Variable Cost = Total Cost - Total Fixed Cost = $2,600 - $2,000 = $600
Variable Rate = Variable Cost ÷ Output = $600 / 1,000 units = $0.60

Chrysntag Company Incurred the Following Costs for the Months of January