The highest value of total cost was $70,000 in June for Fargo Beverages, Inc Its lowest value of total cost was $52,000 in December
The company makes a single product. The production volume in June and December were 13,000 and 7,000 units, respectively. What is the variable cost per month? (Round your answer to the nearest cent.)
A) $1.38 per unit
B) $2.57 per unit
C) $3.00 per unit
D) $11.67 per unit
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)
Variable cost per unit = $3.00 per unit
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