Louis Petit, a manager of Doggone Gorgeous, Inc., was reviewing the water bills of a dog daycare and spa. He determined that its highest and lowest bills of $3800 and $2000 were incurred in the months of May and November, respectively. If 600 dogs were washed in May and 200 dogs were washed in November, what was the fixed cost associated with the company's water bill? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)
A) $2000
B) $3800
C) $1100
D) $1800
C) $1100
Variable cost per unit = Change in total cost / Change in volume of activity
Variable cost per unit = ($3800 - $2000) / (600 dogs - 200 dogs) = $1800 / 400 dogs
Variable cost per unit = $4.50 per dog
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