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At an Activity Level of 8,300 Machine-Hours in a Month

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At an activity level of 8,300 machine-hours in a month, Baudry Corporation's total variable maintenance cost is $220,448 and its total fixed maintenance cost is $556,764. What would be the average fixed maintenance cost per unit at an activity level of 8,600 machine-hours in a month? Assume that this level of activity is within the relevant range.


Definitions:

Variable Manufacturing Overhead

Costs in the production process that fluctuate with the volume of production, such as utilities for the machinery.

Direct Labour Hours

The total hours worked by employees that are directly involved in the manufacturing or production process.

Standard Cost

Standard cost refers to the predetermined cost of manufacturing a single unit or a number of units of product under current or anticipated operating conditions.

Standard Quantity

The predetermined amount of materials, labor, or overhead that should be used in the production process, serving as a benchmark for measuring efficiency.

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