A company has recorded the following data in the two most recent periods.
Total costs
of production
Volume of
production
$
Units
13,500
700
18,300
1,100
What is the best estimate of the company's fixed costs per period?
The correct answer is: $5,100
High output
Low output
Variable cost of
Variable cost per unit $4,800/400 units = $12 per unit
Fixed costs = $18,300 - ($12 x 1,100) = $5,100
Therefore the correct answer is $5,100.
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