Younger Corporation Reports That at an Activity Level of 8,700

question 116

Essay

Younger Corporation reports that at an activity level of 8,700 units, its total variable cost is $653,109 and its total fixed cost is $658,416.
Required:
For the activity level of 8,800 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:

Double-declining-balance Method

An accelerated method of depreciation that counts as an expense twice the straight-line depreciation rate for the declining book value of the asset each year.

Straight-line Method

A method of depreciation that distributes a consistent depreciation expense for an asset throughout its lifetime.

Salvage Value

The estimated residual value of an asset at the end of its useful life, determining how much the asset can be sold for after it is no longer useful for its intended purpose.

Annual Depreciation

The amount of an asset’s cost allocated each year over its useful life, reflecting its consumption, wear and tear, or obsolescence.