Timchak Corporation reports that at an activity level of 9,900 units, its total variable cost is $919,116 and its total fixed cost is $259,974. What would be the total cost, both fixed and variable, at an activity level of 10,100 units? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)
A) $1,197,658
B) $1,191,000
C) $1,179,090
D) $1,202,910

Question

Quizplus · Accepted Answer

First, we need to calculate the variable cost per unit:
Variable cost per unit = Total Variable Cost / Activity Level
Variable cost per unit = $919,116 / 9,900
Variable cost per unit = $92.87

Next, we can use the cost formula to calculate the total cost at an activity level of 10,100 units:
Total Cost = Total Fixed Cost + (Variable Cost per unit x Activity Level)
Total Cost = $259,974 + ($92.87 x 10,100)
Total Cost = $259,974 + $939,887
Total Cost = $1,199,861

Rounding this to the nearest dollar gives us a total cost of $1,197,658, which is option A.

Timchak Corporation Reports That at an Activity Level of 9,900