Question

Younger Corporation reports that at an activity level of 5,700 units, its total variable cost is $45,600 and its total fixed cost is $50,000 Required

The firm is thinking about increasing its activity. So, for the activity level of 5,800 units, compute the total variable cost
Numeric Response

Answer 1

Given data:At an activity level of 5,700 units, Younger Corporation's total variable cost is $45,600 and its total fixed cost is $50,000. We need to calculate the total variable cost for an activity level of 5,800 units.We know that variable cost per unit remains constant, so we can first calculate the variable cost per unit:Variable cost per unit = Total variable cost / Number of units= 45,600 / 5,700= $8 per unitNow, we can use the variable cost per unit to find the total variable cost for an activity level of 5,800 units:Total variable cost = Variable cost per unit × Number of units= 8 × 5,800= $46,400Therefore, the total variable cost for an activity level of 5,800 units is $46,400.