What Is the Formula to Calculate the Variable Rate of a Mixed

question 100

Multiple Choice

What is the formula to calculate the variable rate of a mixed cost when using the high-low method?

• A) total cost at high point ? (variable rate × output at high point)
• B) total cost at high point ? (variable rate × output at low point)
• C)
• \(\frac{\text { high point output - low point output }}{\text { high point cost - low point cost }}\)
• D)
• \(\frac{\text { high point cost - low point cost}}{\text {high point output - low point output }}\)

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Definitions:

Total Asset Turnover Ratio

A financial ratio that measures a company's ability to generate sales from its assets by comparing net sales to average total assets.

Net Profit Margin Ratio

A financial metric that shows the percentage of a company's revenue that remains as profit after all operating expenses, interest, taxes, and preferred stock dividends have been deducted.

Property, Plant, and Equipment

Tangible assets that are held for use in the production or supply of goods or services, rental to others, or administrative purposes and are expected to be used during more than one period.

Classified Balance Sheet

A balance sheet that organizes a company’s assets, liabilities, and equity into subcategories for clearer understanding.