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Asked Oct 22, 2019
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Step 1

Per unit/per machine hour variable cost that is $7 is ascertained by dividing the difference of highest activity costs and lowest activity cost with the difference of highest activity units and lowest activity units.

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Highest activity cost - Lowest activity cost Variable cost per unit = Highest activity units - Lowest activity units $5,730-$2,930 750 350 $2,800 400 = $7

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Step 2

Here, the product of highest activity unit and variable cost per un...

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Variable cost Highest activity units x Cost per unit = 750 x $7 $5,250

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