Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

A business hires machinery for use in its factory. The rental charge for one machine is $12000. Each machine can make 60000 units. The business gave the information below. number of units / total costs excluding rental cost of machinery ($): 90000 → 510000, 120000 → 660000. What is the total fixed cost of producing 100000 units?

  • A$80000
  • B$84000
  • C$150000
  • D$162000

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