mcqs

hi john

do not understand where the 210 batches comes from

Variable cost per hour ($850,000 – $450,000)/(5,000 hours – 1,800 hours) = $125 per hour
Fixed cost ($850,000 – (5,000 hours x $125)) = $225,000
Number of machine hours required for production = 210 batches x 14 hours = 2,940 hours
Total cost ($225,000 + (2,940 hours x $125)) = $592,500, therefore $593,000 to the nearest $’000.