Answer:
The correct answer is B.
Explanation:
Giving the following information:
Month Utilities Machine Hours
January $ 9,600 890
February 9,260 810
March 9,850 900
April 10,260 1,010
May 10,732 1,040
June 10,050 990
To calculate the fixed cost, first, we need to calculate the unitary variable cost using the following formula:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (10,732 - 9,260) / (1,040 - 810)
Variable cost per unit= $6.4
Now, we can calculate the fixed cost:
Fixed costs= Highest activity cost - (Variable cost per unit * HAU)
Fixed costs= 10,732 - (6.4*1,040)= $4,076
Fixed costs= LAC - (Variable cost per unit* LAU)
Fixed costs= 9,260 - (6.4*810)= $4,076
