what was the high level of activity in units

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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XYZ Company uses the high low method to analyze the mixed cost . According to the cost formula derived the total fixed cost is $ 10,000 . Total cost at the high level of activity was $ 58,000 and at the low level of activity was $ 25,000 . If the low level of activity was 2,500 units , what was the high level of activity in units ? Select one : a . 8,500 b . None of the answers given c . 5,800 d . 9,000 e . 8,000
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Step 1

Answer:

 

Option e.

Step 2

Explanation:

 

Compute the variable cost per unit.

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