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 total variable inspection cost at an activity level of 8,100 machine-hours in a month? Assume that this level of activity is within the relevant range.
A)$210,061
B)$196,830
C)$215,379
D)$402,031

Question

Quizplus · Accepted Answer

Variable inspection cost per unit = Total variable inspection cost F1F1F1S1F1F1F10 Total activity
= $210,061 F1F1F1S1F1F1F10 7,900 machine-hours
= $26.59 per machine-hour
Total variable inspection cost = Variable inspection cost per unit F1F1F1S1F1F1F10 Total activity
= $26.59 per machine-hour F1F1F1S1F1F1F10 8,100 machine-hours
= $215,379