The key to optimizing manufacturing costs is to find that ... fixed costs do not change with production levels. However, the marginal cost of production is affected when there are variable costs ...
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How the High-Low Method Works and How to Calculate It1. Calculate Variable Cost per Unit Using the high-low formula for variable cost: Variable Cost = ($58,000 – $39,000) ÷ (1,500 – 900)Variable Cost = $19,000 ÷ 600Variable Cost = $31.67 per ...
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