Answer:
The fixed cost, variable cost per unit and the total cost is $3,800, $4 per unit ,and $6,000 respectively
Explanation:
1. The computation of the variable cost per unit is shown below:
= (High total cost - low total cost) ÷ (High number of cavities - low number of cavities)
= ($6,500 - $5,200) ÷ (675 - 350)
= $1,300 ÷ 325
= $4
2. The computation of the fixed cost is shown below:
Fixed cost = total cost - Variable cost
= $6,500 - (675 × $4)
= $6,500 - $2,700
= $3,800
3. And, the total cost for 550 cavities would be equal to
= Fixed cost + variable cost
= $3,800 + (550 cavities × $4)
= $3,800 + $2,200)
= $6,000
