Answer:
Variable cost per unit= $5.5 per unit
Explanation:
Giving the following information:
Month Total Maintenance Costs Total Machine Hours
January $2,590 330
February 2,890 380
March 3,490 530
April 4,390 660
May 3,090 530
June 4,790 730
To calculate the variable cost using the high-low method, we need to use the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (4,790 - 2,590) / (730 - 330)= 2200/400= $5.5 per unit