Deidoro Company has provided the following data for maintenance cost: Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to: (Round your intermediate calculations to 2 decimal places.)
A) $26,600 per year; $3.10 per machine hour
B) $9,000 per year; $2.20 per machine hour
C) $9,000 per year; $3.10 per machine hour
D) $26,600 per year; $2.20 per machine hour

Question

Deidoro Company has provided the following data for maintenance cost:  Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to: (Round your intermediate calculations to 2 decimal places.)
A) $26,600 per year; $3.10 per machine hour 
B) $9,000 per year; $2.20 per machine hour 
C) $9,000 per year; $3.10 per machine hour 
D) $26,600 per year; $2.20 per machine hour

Quizplus · Accepted Answer

11eacbfc_c8a9_f5a7_8ffe_379407908d61_TB7552_00 Variable cost per unit = Change in cost ÷ Change in activity
= $4,400 ÷ 2,000 machine-hours
= $2.20 per machine-hour
Fixed cost = Total cost − Variable cost element
= $31,000 − ($2.20 per machine-hour × 10,000 machine-hours)
= $31,000 − $22,000
= $9,000

Deidoro Company Has Provided the Following Data for Maintenance Cost