Krouse Corporation Reports That at an Activity Level of 8,100

question 77

Multiple Choice

Krouse 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? Assume that this level of activity is within the relevant range.

• A) $725,844
• B) $706,968
• C) $720,060
• D) $733,152

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Definitions:

Unavoidable Cost

A cost that cannot be eliminated and must be incurred regardless of the action taken.

Relevant Cost

Costs that are directly tied to a specific managerial decision and will change as a result of that decision, critical for effective cost management and decision-making processes.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not factor into future decision making.

Sunk Cost

Costs that have already been incurred and cannot be recovered or changed.