Question

The cost accountant at Company C used the high-low method to determine a cost equation of $14,000 plus $1.50 per unit. If the company plans to produce 200,500 units next month, then the total estimated cost will be $

Answer 1

Total cost= $314,750

Step-by-step explanation:

Giving the following information:

Fixed costs= $14,000

Unitary variable cost= $1.5

First, we need to structure the total cost formula:

Total cost= 14,000 + 1.5x

x= number of units

Now, the total cost for 200,500 units:

Total cost= 14,000 + 1.5*200,500

Total cost= $314,750