At an activity level of 7,900 machine-hours in a month, Manchester Corporation's total variable maintenance cost is $430,550 and its total fixed maintenance cost is $417,120.
-What would be the average fixed maintenance cost per unit at an activity level of 8,000 units in a month? Assume that this level of activity is within the relevant range.
A) $52.14
B) $70.75
C) $52.80
D) $107.30

Question

Quizplus · Accepted Answer

The average fixed maintenance cost per unit is calculated by dividing the total fixed maintenance cost by the activity level. At an activity level of 8,000 units, the average fixed maintenance cost per unit would be $417,120 / 8,000 = $52.14.

At an Activity Level of 7,900 Machine-Hours in a Month