(Appendix 5A) the Blaine Corporation Is a Highly Automated Manufacturer

question 3

Multiple Choice

(Appendix 5A) The Blaine Corporation is a highly automated manufacturer. At an activity level of 6,000 machine setups, total overhead costs equal $240,000. Of this amount, depreciation totals $80,000 (all fixed) and lubrication totals $72,000 (all variable) . The remaining $88,000 of the total overhead cost consists of utility cost (mixed) . At an activity level of 9,000 setups, utility cost totals $112,000.
Assume that the relevant range includes all of the activity levels mentioned in this problem.
-The total fixed overhead costs for Blaine Corporation are most likely closest to:

• A) $112,000
• B) $120,000
• C) $ 40,000
• D) $ 80,000

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Definitions:

Supplier Capabilities

The range of services, products, and efficiencies a supplier can offer to meet the purchasing needs of a company.

Industrial Market

The market for goods and services purchased by businesses and organizations for use in production, operations, or resale.

Service Business

A service business is a company that primarily earns revenue through providing intangible products, such as support, advice, or expertise, rather than physical goods.

Industrial Firms

Companies that engage in the production, distribution, and sale of industrial goods, including manufacturing and construction services.