Presented Below Is the Production Data for the First Six

question 152

Multiple Choice

Presented below is the production data for the first six months of the year showing the mixed costs incurred by Euclid Company. $$\begin{array} { l l r } \text { Month } & \text { Cost } & \text { Units } \\\text { January } & \$ 7,500 & 4,000 \\\text { February } & 13,000 & 7,500 \\\text { March } & 11,500 & 9,000 \\\text { April } & 11,700 & 11,500 \\\text { May } & 13,500 & 12,000 \\\text { June } & 11,850 & 6,000\end{array}$$ Euclid Company uses the high?low method to analyze mixed costs.The variable cost per unit is_____.

• A)$1.25
• B)$0.75
• C)$1.31
• D)$0.132

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Definitions:

Contribution Format

A type of income statement where costs are separated into variable and fixed categories, highlighting the contribution margin.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed costs in a company's cost structure.

Sales Increase

The rise in the volume or amount of sales over a specific period, reflecting business growth.

Net Operating Income

The profit generated from a company's core business operations after deducting all operating expenses except for interest and taxes.