At an activity level of 7,200 machine-hours in a month,Falks Corporation's total variable production engineering cost is $556,416 and its total fixed production engineering cost is $226,008.What would be the total production engineering cost per unit,both fixed and variable,at an activity level of 7,300 machine-hours in a month? Assume that this level of activity is within the relevant range.
A) $107.93
B) $107.18
C) $108.67
D) $108.24

Question

Quizplus · Accepted Answer

Variable cost per unit = $556,416 ÷ 7,200 units = $77.28 per unit
Fixed cost per unit at 7,300 units = $226,008 ÷ 7,300 units = $30.96 per unit
Total cost = Variable cost + Fixed cost
= $77.28 per unit + $30.96 per unit
= $108.24 per unit

At an Activity Level of 7,200 Machine-Hours in a Month,Falks