Answer:
a. $0.40 per unit and $8,000
Explanation:
The computation of the fixed cost and the variable cost per hour by using high low method is shown below:
Variable cost per hour = (High total cost - low total cost) ÷ (High production - low production)
= ($120,000 - $74,000) ÷ (280,000 - 165,000)
= $46,000 ÷ 115,000
= $0.40 per unit
Now the fixed cost equal to
= High total cost - (High production × Variable cost per unit)
= $120,000 - (280,000 × $0.40)
= $120,000 - $112,000
= $8,000
