Question

Corio Corporation reports that at an activity level of 3,100 units, its total variable cost is $155,620 and its total fixed cost is $68,000.

Required:
For the activity level of 3,200 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 other answers to the nearest dollar amount.)
(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

Answer 1

Answer and Explanation:

The computation is shown below:-

a. Total variable cost

= Number of units × (Variable cost ÷ Number of units)

= 3,200 × ($155,620 ÷ 3,100)

= $160,640

b. Total fixed cost

= $68,000

c. Total cost

= Total variable cost + Total fixed cost

= $160,640 + $68,000

= $228,640

d. Average variable cost per unit

= Variable cost ÷ Number of units

= $155,620 ÷ 3,100

= $50.20

e. Average fixed per unit

= Fixed cost ÷ Number of units

= $68,000 ÷ 3,100

= $21.93

f. Average total cost per unit

= Average variable cost per unit + Average fixed per unit

= $50.20 + $21.93

= $72.13