The following question is taken from the December 2011 exam paper.
The following shows the total overhead costs for given levels of a company's total output.
Cost??????????????????? ?Output
?? $??????????????????????? Units
?4,000???????????????????1,000
?7,000?????????????????? 2,000
10,000?????????????? ? ?3,000
?9,500?????????????????? 4,000
A step up in fixed costs of $500 occurs at an output level of 3,500 units.
What would be the variable overhead cost per unit (to the nearest $0.01) using the high-low technique?