The Blaine Corporation is a highly automated manufacturer. At an activity level of 6,000 machine setups, total overhead costs equal $240,000. Of this amount, depreciation totals $80,000 (all fixed) and lubrication totals $72,000 (all variable). The remaining $88,000 of the total overhead cost consists of utility cost (mixed). At an activity level of 9,000 setups, utility cost totals $112,000.Assume that the relevant range includes all of the activity levels mentioned in this problem.The variable cost per setup for utilities is most likely closest to:
A) $8.00 per setup
B) $12.44 per setup
C) $4.00 per setup
D) $14.66 per setup

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The Answer of The Blaine Corporation is a highly automated manufacturer. At an activity level of 6,000 machine setups, total overhead costs equal $240,000. Of this amount, depreciation totals $80,000 (all fixed) and lubrication totals $72,000 (all variable). The remaining $88,000 of the total overhead cost consists of utility cost (mixed). At an activity level of 9,000 setups, utility cost totals $112,000.Assume that the relevant range includes all of the activity levels mentioned in this problem.The variable cost per setup for utilities is most likely closest to:
A) $8.00 per setup
B) $12.44 per setup
C) $4.00 per setup
D) $14.66 per setup

The Blaine Corporation Is a Highly Automated Manufacturer