Question

9. Laconic Company manufactures ultrasound equipment. Based on past experience, Laconic has found that total annual repair and maintenance cost can be represented by the following formula: total annual repair and maintenance cost = $205,000 + $7.50x, where x = machine hours. Last year, Laconic incurred 145,000 machine hours. A B. C. Required: What was the total repair and maintenance cost incurred by Laconic last year? What was the total fixed repair and maintenance cost incurred by Laconic last year? What was the total variable repair and maintenance cost incurred by Laconic last year? What was the repair and maintenance cost per machine hour last year? What was the fixed repair and maintenance cost per machine hour last year? What was the variable repair and maintenance cost per machine hour last year? D. E. F.

Answer 1

A) Total repair and maintenance cost incurred = $205,000 + ($7.50*145,000) Total repair and maintenance cost incurred = $205,000 + $1,087,500 Total repair and maintenance cost incurred = $1,292,500 B) Total fixed repair and maintenance cost = $205,000 C) Total variable repair and maintenance cost = $7.50*145,000 Total variable repair and maintenance cost = $1,087,500 D) Repair and maintenance cost per machine hour = $1,292,500/145,000 Repair and maintenance cost per machine hour = $8.91 per machine hour E) Fixed repair and maintenance cost per machine hour = $205,000/145,000 Fixed repair and maintenance cost per machine hour = $1.41 per machine hour F) Variable repair and maintenance cost per machine hour = $7.50