At an Activity Level of 9,000 Machine-Hours in a Month

question 30

Multiple Choice

At an activity level of 9,000 machine-hours in a month, Moffatt Corporation's total variable maintenance cost is $390,240 and its total fixed maintenance cost is $368,280.What would be the average fixed maintenance cost per unit at an activity level of 9,300 machine-hours in a month? Assume that this level of activity is within the relevant range.

• A) $40.92
• B) $84.28
• C) $39.60
• D) $54.93

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Definitions:

Clearly Distinguishable Component

A part or element of a larger item that can be separated and identified individually in analysis or assessment.

Major Line of Business

A Major Line of Business is a primary segment or activity from which a company generates a significant portion of its revenue.

Major Geographical Area

A significant region or territory in which a business operates, often used in financial reporting to segment results by location.

Held for Future Use

Assets that are not currently utilized in operations but are retained for potential future benefit or use within the organization.