Answer:
$107.5 per machine hour.
Explanation:
Step 1: Calculate the total production engineering cost per hour at activity level of 9,800 machine hours in a month
a. Calculate the Variable cost per Unit = total variable cost/units produced
= $823,440/9400 (initial machine hours)
= $87.6 per machine hour
b. calculate the total variable cost for 9,800 machine hours
=variable cost per unit x 9,800 hours
= $858,480
c. Calculate total production cost for 9,800 hours
=total variable cost + fixed cost
= $858,480 + $195,020
= =$1,053,500
d) calculate the production engineering cost per unit
= Total cost for 9,800/ number of hours
=$1, 053, 500 / 9800 hours
=$107.5 per machine hour.
