Asked by Logan Jordan on Jun 30, 2024
Verified
What would be the average fixed cost per unit at an activity level of 5,200 units? Assume that this level of activity is within the relevant range.
A) $6.24
B) $6.00
C) $14.94
D) $32.59
Fixed Cost
Financial obligations that are static and do not vary with production levels or sales numbers, such as rent, salary payments, and insurance fees.
Activity Level
A measure of the volume of production or operations, often used in cost accounting to allocate variable and fixed costs appropriately.
- Determine and scrutinize variable, fixed, and mixed costs.
Verified Answer
DE
Daniel EllenburgJul 03, 2024
Final Answer :
B
Explanation :
Average fixed cost per unit = Total fixed cost ÷ Total activity
= $31,200 ÷ 5,200 units
= $6.00 per unit
Reference: CH01-Ref30
At an activity level of 9,000 machine-hours in a month, Moffatt Corporation's total variable maintenance cost is $390,240 and its total fixed maintenance cost is $368,280.
= $31,200 ÷ 5,200 units
= $6.00 per unit
Reference: CH01-Ref30
At an activity level of 9,000 machine-hours in a month, Moffatt Corporation's total variable maintenance cost is $390,240 and its total fixed maintenance cost is $368,280.
Learning Objectives
- Determine and scrutinize variable, fixed, and mixed costs.
Related questions
Dizzy Employees a Certified Operator for Each of Its 35 ...
For Liability Insurance, Dizzy Pays a Set Monthly Fee Plus ...
The Cost Graphs Below Show Various Types of Cost Behaviors ...
Because Variable Costs Are Assumed to Change in Direct Proportion ...
A Production Supervisor's Salary That Does Not Vary with the ...