The following shows the total overhead costs for given levels of a company’s total output.

A step up in fixed costs of $500 occurs at an output level of 3500 units.
What would be the variable overhead cost per unit (to the nearest $0.01) using the high low technique?

(a) $1.67 per unit

(b) $1.83 per unit

(c) $2.75 per unit

(d) $3.00 per unit (2 marks)
ACCA F2 Management Accounting

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Cost (S) Output units 4000 1000 7000 2000 10000 3000 9500 4000