Krouse Corporation reports that at an activity level of 8,100 units, its total variable cost is $509,652 and its total fixed cost is $197,316. What would be the total cost, both fixed and variable, at an activity level of 8,400 units? Assume that this level of activity is within the relevant range.
A) $725,844
B) $706,968
C) $720,060
D) $733,152

Question

Quizplus · Accepted Answer

Total cost = Variable cost + Fixed costVariable cost per unit = Total variable cost / Activity level = $509,652 / 8,100 units = $62.92 per unitVariable cost at 8,400 units = $62.92 per unit * 8,400 units = $529,248Total cost at 8,400 units = $529,248 + $197,316 = $726,564

Krouse Corporation Reports That at an Activity Level of 8,100