SHORT ANSWER: Assume a company reports the following mixed costs:

MIXED COSTS

Machine Hours Electric Power Costs

April 15,000 $1,950

May 17,000 $2,080

June 18,000 $2,150

July 14,000 $1,900

August 20,000 $2,200

September 19,000 $2,170

1. Calculate Variable Cost per Unit

Variable Cost/Unit = Cost at High Level - Cost at Low Level / High Output - Low Output

Variable Cost/Unit =

Variable Cost/Unit =

1. Calculate fixed costs for this company.

Total Cost at High Level = Fixed Cost + Variable Cost at High Level

Rearranged: Fixed Cost = Total Cost at High Level - (Variable Cost/Unit x High Output)

Fixed Cost =

Fixed Costs =