Blore Corporation reports that at an activity level of 8,000 units, its total va

Question

Blore Corporation reports that at an activity level of 8,000 units, its total variable cost is $565,600 and its total fixed cost is $83,650. What would be the total cost, both fixed and variable, at an activity level of 8,200 units? Assume that this level of activity is within the relevant range.

Blore Corporation reports that at an activity level of 8,000 units, its total variable cost is $565,600 and its total fixed cost is $83,650. What would be the total cost, both fixed and variable, at an activity level of 8,200 units? Assume that this level of activity is within the relevant range.

Explanation / Answer

Variable cost per unit at 8000 = 565,600 / 8000

                                                   = $ 70.7 per unit

Total cost at 8200 = (8200 *70.7 ) + 83650

                               = 579740 + 83650

                               =$ 663,390

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