Our company has reviewed the utilities bills for our company. We have determined that the highest and lowest bills were $5,000 and $3,200 for the months of January and September. If we produced 1,050 and 600 units in these months, what was the fixed cost associated with the utilities bill?  Group of answer choices$435.50$485.00$590.00$800.00

To find the fixed cost associated with the utilities bill, we need to use the formula for calculating total cost, which is:

Total Cost = Fixed Cost + Variable Cost

We know the total cost for January and September, and we know the number of units produced in these months. We can use this information to find the variable cost per unit, and then use that to find the fixed cost.

First, let's find the variable cost per unit for January and September:

January: $5,000 / 1,050 units =$4.76 per unit September: $3,200 / 600 units =$5.33 per unit

The variable cost per unit should be the same in both months, but it's not. This is because the fixed cost is included in the total cost. To find the fixed cost, we need to find the difference between the total cost and the variable cost for each month.

Let's use the average of the two variable costs per unit to find the fixed cost:

Average variable cost per unit = ($4.76 +$5.33) / 2 = $5.045 per unit

Now, let's find the fixed cost for January:

Fixed cost = Total cost - (Variable cost per unit * Number of units) Fixed cost = $5,000 - ($5.045 * 1,050 units) Fixed cost = $5,000 -$5,297.25 Fixed cost = -$297.25

This doesn't make sense, as the fixed cost can't be negative. There must be a mistake in the question or the given data. The fixed cost can't be calculated with the given information.

To find the fixed cost, we first need to find the variable cost per unit. We can do this by subtracting the lowest bill from the highest bill, and then dividing that by the difference in units produced in those months.

Variable cost per unit = (Highest bill - Lowest bill) / (Units produced in highest bill month - Units produced in lowest bill month)

Variable cost per unit = ($5,000 -$3,200) / (1,050 units - 600 units) = $1,800 / 450 units =$4 per unit

Now that we have the variable cost per unit, we can find the fixed cost. The fixed cost is the total cost minus the variable cost (which is the variable cost per unit times the number of units).

Fixed cost = Total cost - Variable cost Fixed cost = $5,000 - ($4/unit * 1,050 units) = $5,000 -$4,200 = $800

So, the fixed cost associated with the utilities bill is $800.