Managerial Accounting Exam One

As the level of activity increases, how will a mixed cost in total and per unit behave?ANSWER In total - Increase Per Unit - Decrease At an activity level of 8,400 machine-hours in a month, Falks Corporation's total variable production engineering cost is $732,480 and its total fixed production engineering cost is $180,400. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 8,800 machine-hours in a month? Assume that this level of activity is within the relevant range. -ANSWER-Variable cost per machine-hour = $732,480 ÷ 8,400 machine-hours = $87.20 per machine-hour Fixed cost per machine-hour at 8,800 machine-hours = $180,400 ÷ 8,800 machine-hours = $20.50 per machine-hour