Erkkila Inc. reports that at an activity level of 7,900 machine-hours in a month, its total variable inspection cost is $210,061 and its total fixed inspection cost is $191,970.
-What would be the average fixed inspection cost per unit at an activity level of 8,100 machine-hours in a month? Assume that this level of activity is within the relevant range.
A)$50.89
B)$24.30
C)$23.70
D)$32.96

Question

Quizplus · Accepted Answer

Average fixed inspection cost = Total fixed inspection cost F1F1F1S1F1F1F10 Total
activity = $191,970 F1F1F1S1F1F1F10 8,100 machine-hours
= $23.70 per machine-hour