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At an activity level of 9,500 machine-hours in a month, Falks Corporation’s total variable production engineering...

At an activity level of 9,500 machine-hours in a month, Falks Corporation’s total variable production engineering cost is $779,950 and its total fixed production engineering cost is $200,970. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 9,900 machine-hours in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.)

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Answer #1

Total production engineering cost per machine hour = Fixed cost + Variable cost / Machine hours

Variable cost per hour = $779,950 / 9,500 = $82.1 per machine hour

Total production engineering cost per machine hour = $200,970 + 812,790 (9,900*$82.1) / 9,900

Total production engineering cost per machine hour = $102.4 per machine hour

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