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17 Erkkila Inc. reports that at an activity level of 6,700 machine-hours in a month, its total variable inspection cost is $424,130 and its total

17

Erkkila Inc. reports that at an activity level of 6,700 machine-hours in a month, its total variable inspection cost is $424,130 and its total fixed inspection cost is $166,530.

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 $23.79
b $88.16
c $24.86
d

$38.45

which is correct?

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