Question

Assume that output was 1,000 units in January and 3,500 units in February, utility cost is a mixed cost, and the fixed cost of utilities was $2,000. What was the variable rate per unit of output for utilities cost?

Answer 1

Answer:

$0.60

Explanation:

Missing Information: Table is missing, hence, attached with the answer.

Variable cost = Total utilities cost - Fixed cost

                      = $2,600 - $2,000

                      = $600

Variable rate per unit = Variable cost ÷ No. of units produced

                                    = $600 ÷ 1000

                                    = 0.6

Thus, variable rate per unit of output for utilities cost is $0.60.