What would be the total variable inspection cost at an activity level of 2,400 machine-hours in a month? Assume that this level of activity is within the relevant range.
A) $78,918
B) $69,846
C) $79,824
D) $10,368

Question

Quizplus · Accepted Answer

Variable inspection cost per unit = Total variable inspection cost ÷ Total activity
= $69,846 ÷ 2,100 machine-hours
= $33.26 per machine-hour
Total variable inspection cost = Variable inspection cost per unit × Total activity
= $33.26 per machine-hour × 2,400 machine-hours
= $79,824

What Would Be the Total Variable Inspection Cost at an Activity