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Tresset [83]
2 years ago
9

The following costs are budgeted for Harlow Corporation for next year: The costs above are based on a level of activity of 20,00

0 units. Assuming that this activity is within the relevant range, what would total cost per unit be for Harlow if the level of activity was only 18,000 units?
Business
1 answer:
ololo11 [35]2 years ago
5 0

Answer:

$48.50

Explanation:

Harlow Corporation

First step is to calculate for Variable cost per unit:

Variable cost per unit =

$270,000 ÷ 20,000 units

= $13.50 per unit

Second step is to calculate for the cost function

Cost function :

Y = $630,000 + $13.50X

Y= $630,000 + $13.50(18,000)

Y=$630,000+$243,000

Y = $873,000

Therefore:

Total cost / number of units = total cost per unit$

Total cost =$873,000

Number of units= 18,000

$873,000 ÷ 18,000

= $48.50

Therefore the total cost per unit is $48.50

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