The highest value of total cost was $800,000 in June for Mantilla 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 8,000 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) $8,000
C .C)
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)
Change in total cost (A) $290,000
Change in volume of activity (B) 5,000
Variable cost per unit (A / B) $58.00
Total costs for June
Total variable costs for June (58.00 x 13,000 ) 754,000
Fixed costs for June ($800,000 - 754,000 ) $46,000
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