ACCA PM · Chapter 11 · Question 5 of 10
Total production costs were $74,000 at an activity level of 12,000 units and $102,000 at 20,000 units. Using the high-low method, what is the expected total cost at 17,000 units?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $91,500
Explanation
Variable cost per unit = ($102,000 - $74,000) / (20,000 - 12,000) = $3.50. Fixed cost = $74,000 - (12,000 x $3.50) = $32,000. Cost at 17,000 units = $32,000 + (17,000 x $3.50) = $91,500.
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