At an Activity Level of 4,000 Machine-Hours in a Month

question 74

Multiple Choice

At an activity level of 4,000 machine-hours in a month, Curt Corporation's total variable production engineering cost is $154,200 and its total fixed production engineering cost is $129,000. What would be the total production engineering cost per unit, both fixed and variable, at an activity level of 4,300 machine-hours in a month? Assume that this level of activity is within the relevant range.

• A)$68.33
• B)$68.55
• C)$70.80
• D)$65.86

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Definitions:

Average Total Cost

The per unit cost of production, calculated by dividing the total cost of production by the quantity of output produced.

Normal Profit

The minimum amount of profit needed for a company to remain operational in the long term, often considered as part of fixed costs.

Identical Firms

Companies that produce and sell exactly the same products or services, making them perfect substitutes for one another in a market.

Total Cost

The complete sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.