Hinrichs Corporation Reports That at an Activity Level of 2,400

question 113

Essay

Hinrichs Corporation reports that at an activity level of 2,400 units, its total variable cost is $174,504 and its total fixed cost is $55,080.Required:
For the activity level of 2,700 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.

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Definitions:

Net Operating Income

The earnings generated from the primary activities of a business, before subtracting interest and tax expenses.

Break-even Point

The point at which total costs and total revenue are equal, resulting in no net loss or gain for the business.

Unit Sales

The quantity of product sold by a company in a given period.

Unit Contribution Margin

Unit Contribution Margin is the difference between the selling price of a unit and the variable cost associated with making that unit, indicating how much each unit contributes to covering fixed costs and generating profit.