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:

Compensation

Payment or reward provided for services rendered or harm suffered, often relating to employment or legal settlements.

Müller-Lyer Illusion

A visual illusion in which two lines of the same length appear to be different lengths due to the orientation of arrow-like tails attached to their ends.

Susceptible

The state of being likely to be influenced or harmed by a particular thing or condition.