Swanson and Associates Presently Leases a Copy Machine Under an Agreement

question 38

Multiple Choice

Swanson and Associates presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Swanson made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.
Swanson's variable cost per copy is:

• A) $0.040.
• B) $0.051.
• C) $0.053.
• D) $0.056.
• E) None of the other answers is correct.

---

Definitions:

White Knight

In a corporate context, a friendly company or individual that acquires a corporation at risk of a hostile takeover.