Reference no: EM132973626

Compton Corporation is a wholesale distributor of educational CD-ROMs. The company's records indicate the following:

                                                          This Year                  Last Year

Units Sold                                    250,000              200,000

Sales                                          $1,250,000              $1,000,000

Cost of goods sold                           875,000               700,000

Gross margin                                  375,000                300,000

Selling and administrative expenses    222,000                210,000

Net operating income                          $153,000             $90,000

Problem 1: Using the high-low method of analysis, what are the company's estimated variable selling and administrative expenses per unit?

Option 1: $4.17

Option 2: $0.88

Option 3: $0.96

Option 4: $0.24