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At an activity level of 8,900 machine-hours in a month, Falks Corporation’s total variable production engineering cost is $760,060 and its total fixed production engineering cost is $152,880. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 9,100 machine-hours in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)

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Answer:

Total cost= $930,020

Explanation:

Giving the following information:

8,900 machine-hours:

Variable costs=  $760,060

Fixed costs= $152,880.

First, we need to calculate the unitary variable cost per machine-hour.

Unitary variable cost= 760,060/8,900= $85.4

Now, for 9,100 hours:

Total cost= 152,880 + 85.4*9,100

Total cost= $930,020

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