Question

41.      Assume that maintenance is a total of $90,000 at a level of 40,000 machine hours. Also, assume that both 40,000 and 50,000 machine hours are within the relevant range for our company. If maintenance is a variable cost, compute the cost per machine hour at a level of 50,000 machine hours.

1. $l.80 per hour
2. $2.25 per hour
3. It cannot be determined from the information given.

42.       Refer to the previous question. If maintenance is a mixed cost, compute the cost per machine hour at a level of 50,000 hours.

1. $1.80 per hour
2. $2.25 per hour
3. It cannot be determined from the information given.

43.       Again, refer to question 3. If maintenance is a fixed cost, compute the cost per machine hour at a level of 50,000 hours.

1. $1.80 per hour
2. $2.25 per hour
3. It cannot be determined from the information given.

Answer 1

41. a)$1.80 per hour

maintance total = $90000 level A mailine Herr = 40,000 torre at Relevant Rang of Company souro Hire al maintance is conable cost : machine Rate - maintance Cost for Hour mailine Clours a $1.80 per hors I - $ = $900 T $1.80 per Herr Under voresle ! b) mixed cost of maintence C if it is mixed cost we have a notcler, - onformation about all the cost (ie, fixed cost & conable : It cannot be determined from the given Informatie & If maritance is a freed Cast halie & maintance cost ner Rate - - Relevant range of mathey - $ 9000 E 2.95 per hour $ foco Tb.$2.25 per hour under fixed Cost a manface

42. c) It can't be determined from the information given

43. b) $2.25 per hour