Answer:
Initiation fee= $50
Monthly charge= $25
Step-by-step explanation:
Giving the following information:
For 2 months it is $100 and for 6 months it is $200.
<u>To calculate the fixed cost (initiation fee) and the variable cost per month, we will use the high-low method:</u>
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (200 - 100) / (6 - 2)
Variable cost per unit= $25
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 200 - (25*6)
Fixed costs= $50
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 100 - (25*2)
Fixed costs= $50
Initiation fee= $50
Monthly charge= $25