Timchak Corporation reports that at an activity level of 9,900 units, its total variable cost is $919,116 and its total fixed cost is $259,974. What would be the total cost, both fixed and variable, at an activity level of 10,100 units? Assume that this level of activity is within the relevant range.

$1,197,658

Explanation:

The computation of Total Cost at activity level of 10,100 Units is shown below:-

Variable Cost per Unit = Variable cost ÷ Number of units

= $919,116 ÷ 9,900

= $92.84

Total Variable Cost at activity level of 10,100 Units = Variable Cost per Unit × Number of units

= $92.84 × 10,100

= $937,684

Total Cost at activity level of 10,100 Units = Fixed cost +  Total Variable Cost at activity level of 10,100 Units

= $259,974 + $937,684

= $1,197,658

Therefore we have applied the above formula.

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