Find the highest volume of 800 packs at a cost of $XXXX (Note**) and the lowest volume of 100 packs at a cost of $1,010.

Note ** an average of January and September: $5,200 + $4,960/2 = $XXXX

Step 2. Compute the variable rate per pack as:

NumberTraining of PacksPack Cost

Highest volume800$

Lowest volume-100(1,010)

__________________

Difference $

Step 3.Divide the difference in cost ($XXXX) by the difference in number of packs (XXX) to arrive at the variable cost rate:

$XXXX / XX = $5.814

Step 4.Compute the fixed overhead rates as follows:

4a. At the highest level:

Total cost$XXXX

Less: Variable portion

[800 packs $5.814 @](4,651)

______

$429

4b. At the lowest level:

Total cost$XXXX

Less: Variable portion

[100 packs $5.814 @](XXX)

______

$XXX

4c. Proof totals; $XXX fixed portion at both levels.