At an activity level of 6,800 units, Henkes Corporation's total variable cost is $125,188 and its total fixed cost is $164,152.Required:For the activity level of 7,100 units, compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the average total cost per unit. Assume that this activity level is within the relevant range.
What will be an ideal response?
Variable cost = $125,188 ÷ 6,800 units = $18.41 per unit
| Activity level | 7,100 | |
| Total cost: | ||
| Variable cost (a) [7,100 units × $18.41 per unit] | $ | 130,711 |
| Fixed cost (b) | 164,152 | |
| Total (c) | $ | 294,863 |
| Cost per unit: | ||
| Variable cost (d) | $ | 18.41 |
| Fixed cost (e) [$164,152 ÷ 7,100 units] | 23.12 | |
| Total (f) | $ | 41.53 |
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What will be an ideal response?
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