Answer:
Total cost= $752,060
Explanation:
<u>To calculate the fixed and variable cost under the high-low method, we need to use the following formulas:</u>
<u></u>
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (853,560 - 723,060) / (540,000 - 450,000)
Variable cost per unit= $1.45
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 853,560 - (1.45*540,000)
Fixed costs= $70,560
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 723,060 - (1.45*450,000)
Fixed costs= $70,560
<u>Now, the total cost for 470,000 units:</u>
<u></u>
Total cost= 70,560 + 1.45*470,000
Total cost= $752,060
