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2 June, 06:33

Hadrana corporation reports that at an activity level of 5,500 units, its total variable cost is $275,330 and its total fixed cost is $86,240. what would be the average fixed cost per unit at an activity level of 5,600 units? assume that this level of activity is within the relevant range.

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  1. 2 June, 06:51
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    Calculation of average fixed cost per unit at an activity level of 5,600 units:

    The average fixed cost per unit can be calculated using the following formula:

    Average Fixed cost Per unit = Total Fixed Cost / Number of Units

    Total Fixed Cost at the level of 5,600 units is given $86,240

    Hence, Average Fixed cost Per unit = 86240/5600 = $15.40

    So, the average fixed cost per unit at an activity level of 5,600 units is $15.40
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