Okafor Company Manufactures Skis

question 245

Multiple Choice

Okafor Company manufactures skis.The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery.Data for the past four months were collected.​ ​
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What would Okafor Company's cost formula be to estimate the cost of leasing within the relevant range?

• A) total lease cost = $456 + ($38.20 × machine hours)
• B) total lease cost = $516 + ($38.18 × machine hours)
• C) total lease cost = $420 + ($37.25 × machine hours)
• D) none of these are correct

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Definitions:

Range Slipout

A condition where a transmission unexpectedly slips out of a selected drive range into neutral or another range, often due to mechanical failure.

Leaking Air Hose

A condition where an air hose has developed breaches, resulting in the unintended escape of air, potentially affecting the performance of pneumatic systems.

COE Truck Chassis

A type of truck design where the cab is situated over the engine, offering better visibility and maneuverability.