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Chen Corp Uses the High-Low Method to Estimate How Its Costs

Question 118

Multiple Choice

Chen Corp. uses the high-low method to estimate how its costs vary with levels of production. For the year, its high production was 50,000 units in a day, at a cost of $900,000, and its low production was 30,000 units, at a cost of $600,000. Its variable cost per unit is


A) Zero
B) 10
C) 15
D) 20

Correct Answer:

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