At an activity level of 9,500 machine-hours in a month, Falks Corporation\'s tot

Question

At an activity level of 9,500 machine-hours in a month, Falks Corporation's total variable production engineering cost is $764,275 and its total fixed production engineering cost is $218,540. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 9,800 machine-hours in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.) Multiple Choice $101.86 $102.75 $102.93 $102.40

Explanation / Answer

Variable cost per machine hour=(764275/9500)=$80.45

Hence total cost at 9800 hours=(9800*80.45)+218540=$1006950

Hence cost/machine hour=(1006950/9800)=$102.75

[Total fixed costs and VC/machine hour do not change with change in units].

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