Corio Corporation reports that at an activity level of 3,600 units, its total va

Question

Corio Corporation reports that at an activity level of 3,600 units, its total variable cost is $198,900 and its total fixed cost is $78,773.

For the activity level of 3,700 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.

(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 / Answer

Hi,

Please find the answer as follows:

Notes:

Total Variable Cost = 198900/3600*3700 = 204425

Average Variable Cost = 198900/3600 = 55.25

Average Fixed Cost = 78773/3700 = 21.29

Average Total Cost = 55.25 + 21.29 = 76.54

Thanks.

Total variable cost 204425
Total fixed cost 78773 Remains Same
Total cost 283198
Average variable cost 55.25 per unit Average fixed cost 21.29 per unit Average total cost 76.54 per unit

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