Erkkila Manufacturing Ltd. reports the following inspection costs at an activity level of 8,000 machine-hours per month: -Total Variable Inspection Cost = $480,000 -Total Fixed Inspection Cost = $200,000 What would be the average fixed inspection cost per unit at an activity level of 8,500 machine-hours per month, assuming this level of activity is within the relevant range? a) $23.53 b) $25.00 c) $27.64 d) $30.50

Erkkila Manufacturing Ltd. reports the following inspection costs at an activity level of 8,000 machine-hours per month: -Total Variable Inspection Cost = $480,000 -Total Fixed Inspection Cost = $200,000 What would be the average fixed inspection cost per unit at an activity level of 8,500 machine-hours per month, assuming this level of activity is within the relevant range? a) $23.53 b) $25.00 c) $27.64 d) $30.50

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 28E: Assume that the inspection activity has an expected cost of 120,000. Expected direct labor hours are...

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