1. Erkkila Inc. reports that at an activity level of 6,700 machine-hours in a month, its total variable inspection cost is $426,380 and its total fixed inspection cost is $192,780.

What would be the average fixed inspection cost per unit at an activity level of 7,000 machine-hours in a month? Assume that this level of activity is within the relevant range.

a.$34.87

b.$92.41

c. $27.54

d. $28.77

2. Bellucci Corporation has provided the following information:

	Cost per Unit		Cost per Period
Direct materials	$	7.40
Direct labor	$	3.65
Variable manufacturing overhead	$	1.45
Fixed manufacturing overhead			$	117,900
Sales commissions	$	1.20
Variable administrative expense	$	0.75
Fixed selling and administrative expense			$	44,100

The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to (assume that the increase is within the relevant range):

a.$12.50

b.$32.45

c.$29.05

d.$25.60

3. The following costs were incurred in May:

Direct materials	$	46,400
Direct labor	$	31,300
Manufacturing overhead	$	24,300
Selling expenses	$	18,300
Administrative expense	$	29,700

Prime costs during the month totaled:

a.$150,000

b.$102,000

c.$77,700

d.$55,600