Answer:
The variable cost is $2.67 per dog.
Explanation:
The variable cost per unit can be determine by using the highlow method to separate the variable component of the given mixed cost. the variable cost is the one that varies with the level of output. Under high low method, we calculate the variable cost per unit by using the following formula:
Variable cost per unit = (Cost at highest activity level - cost at lowest activity level) / (Highest activity level in units - lowest activity level in units)
Variable cost per unit = (3600 - 2800) / (500 - 200)
Variable cost per unit = $2.67 per dog
I had to look for the options and here is my answer:
Based on the one presented above, we can say that the equivalent equation can be written like this: <span>BI + P = COGS + EI. BI refers to the beginning inventory and P is the purchases. The COGS is the cost of goods sold. EI is the ending inventory. Hope this helps.</span>
