The following information is available for a company's cost of sales over the last five months. Using the high-low method, the estimated variable cost of sales per unit sold is:
A) $25.42.
B) $77.50.
C) $34.23.
D) $15.00.
E) $30.62.

Question

The following information is available for a company's cost of sales over the last five months.  Using the high-low method, the estimated variable cost of sales per unit sold is:
A) $25.42. 
B) $77.50. 
C) $34.23. 
D) $15.00. 
E) $30.62.

Quizplus · Accepted Answer

Variable cost per unit = Change in cost/change in units (using highest and lowest level of activity)
($61,000 − $31,000)/(2,400 − 400) = $15.00 per unit

The Following Information Is Available for a Company's Cost of Sales