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    Question

    The following data relates to a semi-variable factory

    overhead: Using the HighтАУLow Method, the fixed cost is:
    A тВ╣ 20,000 Correct Answer Incorrect Answer
    B тВ╣ 25,000 Correct Answer Incorrect Answer
    C тВ╣ 30,000 Correct Answer Incorrect Answer
    D тВ╣ 40,000 Correct Answer Incorrect Answer
    E тВ╣ 45,000 Correct Answer Incorrect Answer

    Solution

    Variable cost per unit = (55,000 тИТ 34,000) ├╖ (5,000 тИТ 2,000) = 21,000 ├╖ 3,000 = тВ╣ 7 per unit Fixed cost = Total cost тИТ (Variable cost ├Ч Units) = 55,000 тИТ (7 ├Ч 5,000) = 55,000 тИТ 35,000 = тВ╣ 20,000

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