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At a total of 150,000 machine hours, a company had total product costs of $2,100,000. This total was made up of $450,000 for Cost 1 (which is variable), $900,000 for Cost 2 (which is fixed), and $750,000 for Cost 3 (which is mixed). At a level of 200,000 machine hours, the company had total product costs of $2,390,000. Of this $2,390,000, how much is Cost 3

Respuesta :

Answer:

The cost 3 is 890000 dollars.

Explanation:

Total product costs = $2100000

Variable cost included in total product costs = $450000

Fixed cost included in total costs = $900,000

Mixed costs = $750000

[tex]\text{Variable cost per machine hour} = \frac{Varible costs}{Machine hours} \\[/tex]

[tex]= \frac{450000}{150000} \\[/tex]

[tex]= $3 dollar[/tex]

[tex]\text{Now to find mixed cost when there are 200000 machine hours that has costing 2390000 dollars.} \\[/tex][tex]total \ costs = 2390000 \ dollars \\[/tex]

[tex]variable \ cost \ (cost 1), \ 200000 \times 3 = 600000 \ dollars \\[/tex]

[tex]Fixed \ costs \ (cost 2) = 900000 \ dollars \\[/tex]

[tex]cost 3 (mixed cost) = Total costs - variable cost - Fixed costs[/tex]

cost 3 (mixed cost) = 2390000 – 600000 - 900000

cost 3 (mixed cost) = 890000 dollars.

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