Sonor Systems Undertakes Its Own Machine Maintenance

question 168

Multiple Choice

Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour. Last year 275,000 machine hours were used to produce 100,000 units. Compute the total machine maintenance cost for last year.

• A)$570,000
• B)$550,000
• C)$420,000
• D)$20,000

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