Deidoro Company Has Provided the Following Data for Maintenance Cost

question 43

Multiple Choice

Deidoro Company has provided the following data for maintenance cost:
Maintenance cost is a mixed cost with variable and fixed components.The fixed and variable components of maintenance cost are closest to:

• A) $26,600 per year; $3.10 per machine hour
• B) $9,000 per year; $2.20 per machine hour
• C) $9,000 per year; $3.10 per machine hour
• D) $26,600 per year; $2.20 per machine hour

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Definitions:

Effective Tax Rate

The average percentage of one's total income paid in taxes, factoring in all deductions and credits.

Capital Structure

The mix of a company's debt, equity, and other sources of financing used to fund its operations and growth.

Cost of Capital

The minimum return that a business needs to generate on its projects to preserve its marketplace value and draw in financing.

Flotation Costs

Expenses incurred by a company in issuing new stocks or bonds, including underwriting, legal, and registration fees.