Holly CoUses the High-Low Method

question 115

Multiple Choice

Holly Co.uses the high-low method.It had an average cost per unit of $10 at its lowest level of activity when sales equaled 10,000 units and an average cost per unit of $6.50 at its highest level of activity when sales equaled 20,000 units.Holly would estimate fixed costs as:

• A)$70,000
• B)$16.50
• C)$8.25
• D)$100,000

---

Definitions:

Excise Tax

A tax levied on specific goods, services, or transactions, often included in the price of the product.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to produce and sell, holding other factors constant.

Excise Tax

A tax levied on specific goods, services, and activities, such as gasoline, alcohol, and tobacco.

Supply Curve

is a graphical representation of the relationship between the price of a good and the quantity of that good that suppliers are willing to produce and sell.