Friday 14 December 2012

Corio Corporation reports that at an activity level of 4,800 units, its total variable cost is $328,224 and its total fixed cost is $128,919.

Corio Corporation reports that at an activity level of 4,800 units, its total variable cost is $328,224 and its total fixed cost is $128,919.
 
Required:

For the activity level of 4,900 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. (Round your "Average cost" to 2 decimal places and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

       
(a) Total variable cost $    
(b) Total fixed cost $    
(c) Total cost $    
(d) Average variable cost   per unit  
(e) Average fixed cost   per unit  
(f) Average total cost   per unit  



Explanation: Variable cost = $328,224 ÷ 4,800 units = $68.38 per unit

     
  Activity level $ 4,900   
  Total cost:    
  Variable cost (a) [4,900 units × $68.38 per unit]   335,062   
  Fixed cost (b)   128,919   
 

  Total (c) $ 463,981   
 



  Cost per unit:    
  Variable cost (d)   68.38   
  Fixed cost (e) [$128,919 ÷ 4,900 units]   26.31   
 

  Total (f)   94.69   
 

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