Answer:
Variable cost per unit = $42 per unit
Total fixed cost = $107,730
Total cost for 1,300 units = $162,330
Explanation:
Mathematically;
Variable cost per unit=[Total cost at highest level-Total cost at lowest level]/(Highest level-Lowest level)
From the question;
Total cost at highest level = 223,440
Total cost at lowest level = 143,640
Highest level = 2755
lowest level = 855
Substituting these values, we have;
Variable cost per unit = (223,440-143,640)/(2755-855) = 79,800/1900 = $42 per unit
Fixed costs = Total cost at highest level- ( variable cost per unit * units produced at highest level) = 223,440-(42 * 2755) = 107,730
Total cost for 1,300 units
Total cost = Fixed cost + Variable cost per unit(number of units)
= $107,730 + 42(1,300) = $162,330
