1- Erkkila Incorporated reports that at an activity level of 6,100 machine-hours in a month, its total variable inspection cost is $425,480 and its total fixed inspection cost is $166,656.

What would be the average fixed inspection cost per unit at an activity level of 6,400 machine-hours in a month? Assume that this level of activity is within the relevant range.

• $97.07
• $27.32
• $43.71
• $26.04

2- Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year:

Cost of clay used in production	$ 70,000
Wages paid to the workers who paint the figurines	$ 96,000
Wages paid to the sales manager's secretary	$ 28,000
Cost of junk mail advertising	$ 45,000

What is the total of the product costs above?

Multiple Choice

• $0
• $73,000
• $166,000
• $169,000