Chapter 21, Problem 6E

To determine

Cost behavior analysis:

Cost behavior analysis means to study how the cost changes as the level of volume changes.

To calculate:

In the question quantity of sales and cost of sales are given. We have to determine the cost behavior using scatter diagram and we have to draw estimated line of cost behavior. Further, we have to calculate the fixed cost and Variable cost per unit using low high method.

Solutions:

The cost behavior in the above is Mixed cost.
The fixed cost is $ 2500 and the variable cost per unit is $1.5.