Answer:
Total income= $1,350
Step-by-step explanation:
<u>First, we need to calculate the fixed income and variable income. We will use the high-low method:</u>
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Variable income sales per dollar= (Highest income - Lowest income)/ (Highest sales - Lowest sales)
Variable income sales per dollar= (1,600 - 1,400) / (16,000 - 12,000)
Variable income sales per dollar= $0.05
Fixed income= Highest income - (Variable income sales per dollar * Highest sales)
Fixed income= 1,600 - (0.05*16,000)
Fixed income= $800
Fixed income= Lowest income - (Variable income sales per dollar* Lowest sales)
Fixed income= 1,400 - (0.05*12,000)
Fixed income= $800
<u>Now, for $11,000 sales:</u>
Total income= 800 + 0.05*11,000
Total income= $1,350
