Question:
In the Gabbana Company, maintenance costs are a mixed cost. At the low level of activity (40 direct labor hours), maintenance costs are $600. At the high level of activity (100 direct labor hours), maintenance costs are $1,100. Using the high-low method, what is the variable maintenance cost per unit and the total fixed maintenance cost?
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Variable Cost
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Total
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Per Unit
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Fixed Cost
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$8.33
|
$267
|
|
$8.33
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$500
|
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$11.00
|
$220
|
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$15.00
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$400
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