Blore Corporation reports that at an activity level of 7,700 units, its total variable cost is
$542,080 and its total fixed cost is $80,650. What would be the total cost, both fixed and
variable, at an activity level of 7,900 units? Assume that this level of activity is within the
relevant range.
Blore Corporation reports that at an activity level of 7,700 units, its total variable cost is
$542,080 and its total fixed cost is $80,650. What would be the total cost, both fixed and
variable, at an activity level of 7,900 units? Assume that this level of activity is within the
relevant range.
Solution
Variable Costs               542,080.00 No of units
                   7,700.00 Variable cost per unit(Total VC/No of
units) Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 70.40 Fixed Costs
                 80,650.00 Statement showing computation of cost for
7900 Units Particulars Ampunt Variable Cost(70.40*7900) Â Â Â Â Â Â Â Â Â Â Â Â Â Â
556,160.00 Fixed Costs                  80,650.00 Total Costs
              636,810.00 Note: Fixed Costs does not change with change in
level of activity