Your Corporation reports that at an activity level of 8100 u

Your Corporation reports that at an activity level of 8,100 units, its total variable cost is $509,652 and its total fixed cost is $197,316. What would be the total cost, both fixed and variable, at an activity level of 8,400 units? This level of activity is within the relevant range.

Solution

Variable cost per unit=$509652/8100 units

=$62.92 per unit

Hence total cost at 8400 units=Variable cost+Fixed cost

=(62.92*8400)+197316

=$725844.

NOTE:Variable cost per unit and Total fixed cost do not change with change in units.