Liva Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available:
A) $500 + $1.00 per direct labor hour
B) $300 + $1.50 per direct labor hour
C) $100 + $0.20 per direct labor hour
D) $200 + $0.10 per direct labor hour

Question

Quizplus · Accepted Answer

Among the given options, choice C has the lowest fixed cost of $100 and the lowest variable cost of $0.20 per direct labor hour. This indicates that choice C will result in the lowest maintenance cost compared to the other options.

Liva Company Wants to Develop a Cost Function for Its