At an Activity Level of 8,400 Units in a Month,Braughton

question 34

Multiple Choice

At an activity level of 8,400 units in a month,Braughton Corporation's total variable maintenance and repair cost is $697,284 and its total fixed maintenance and repair cost is $464,100.What would be the total maintenance and repair cost,both fixed and variable,at an activity level of 8,500 units in a month? Assume that this level of activity is within the relevant range.

• A) $1,175,210
• B) $1,169,685
• C) $1,161,384
• D) $1,168,297

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Definitions:

Average Variable Cost

The cost of production that varies with the output level, calculated by dividing the total variable costs by the number of units produced.

Average Product

is the output per unit of input, such as the quantity of goods produced per labor hour, and is used to measure productivity.

Marginal Cost

The expenditure resulting from the creation of an additional unit of a product or service.

Short-run Total Cost

The total of all costs, both fixed and variable, that a firm incurs in producing goods or services in the short run.