Wentworth Ltd sold 100 000 1 litre bottles of mineral water last year at $4 per unit
Question:
Wentworth Ltd sold 100 000 1 litre bottles of mineral water last year at $4 per unit and made a profit of $50 000. This year the costs for Wentworth Ltd remained the same, it sold 120 000 units at the same price, and made a profit of $80 000.
Required
(a) Determine the total fixed costs per year and the total variable cost per unit for Wentworth Ltd using the high-low method.
(b) Write an equation for the cost function based on your answer to (a).
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Step by Step Answer:
a If the profit was 50 000 last year total costs must have been 350 000 ...View the full answer
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