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Determine the variable cost per unit

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Reference no: EM133186391

Question - Dodge It Company's total monthly shipping costs fluctuate with the volume of units shipped. Data from the last six months is as follows:

Required -

1. Determine the variable cost per unit and the total monthly fixed cost using the high-low method.

2. State the cost formula for the shipping cost.

3. Is it appropriate to use the cost formula created in part 2 for an activity level of 19,000 units? Explain.

4. Describe the behaviour of a variable cost when the level of activity decreases. Provide one example of a variable cost.

Reference no: EM133186391

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