Answer:
$4,900
Explanation:
Given that,
Total cost at a production level of 400 units = $8,500
Each unit of pulp requires = 6 direct labor hours
Variable cost = $1.50 per direct labor hour
Total variable cost:
= Cost per direct labor hour × Direct labor hours required for each unit × No. of units produced
= $1.50 × 6 × 400
= $3,600
Total cost is sum total of total fixed cost and total variable cost.
Total cost = Total fixed cost + Total variable cost
$8,500 = Total fixed cost + $3,600
$8,500 - $3,600 = Total fixed cost
$4,900 = Total fixed cost
