Question

Kim was reviewing the water bills of a dog daycare. She determined that its highest and lowest bills of $3600 and $2800 were incurred in the months of May and November, respectively. If 500 dogs were washed in May and 200 dogs were washed in November, using the high / low method. What was the variable cost per dog associated with the company's water bill?

Answer 1

The correct answer is $2.67.

Step-by-step explanation:

According to the scenario, the given data are as follows:

Highest bill = $3,600

Lowest bill = $2,800

Maximum dogs washed = 500

Lowest dogs washed = 200

So, we can calculate the variable cost per dog by using following formula:

Variable cost per dog = [Highest bill -Lowest bill] ÷ (Highest Dogs washed - Lowest Dogs Washed)

= ( $3,600 - $2,800) ÷ ( 500 - 200)

= $800 ÷ 300

= $2.67