Maxwell Company makes treadmills.The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory.Data for the past four months were collected.
What would Maxwell Company's estimate of total janitorial cost be at a level of 600 machine hours?

A) $11,280
B) $7,500
C) $4,080
D) $6,120

Question

Maxwell Company makes treadmills.The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory.Data for the past four months were collected.  
What would Maxwell Company's estimate of total janitorial cost be at a level of 600 machine hours?

A) $11,280 
B) $7,500 
C) $4,080 
D) $6,120

Quizplus · Accepted Answer

SUPPORTING CALCULATIONS:
($11,400 - $10,200) / (610- 510) = $12 
$11,400 - ($12 × 610) = $4,080
OR
$10,200 - ($12 × 510) = $4,080
 
$4080 + ($12 × 600)

Maxwell Company Makes Treadmills