Figure 3-1 ALF Systems Undertakes Its Own Machine Maintenance

question 119

Multiple Choice

Figure 3-1 ALF 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.
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See Figure 3-1.If 300,000 machine hours had been worked last year, what would be the total machine maintenance cost?

• A) $600,000
• B) $620,000
• C) $420,000
• D) $220,000

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Definitions:

Limited Partner

An investor in a partnership who has limited liability to the extent of their investment in the partnership and does not actively manage the business.

Sue

A legal action where an individual or entity brings a lawsuit against another in a court of law.

Certificate of Limited Partnership

A legal document that formalizes the establishment of a limited partnership and outlines its terms.

Limited Liability

A legal structure where a company's owners are protected from personal responsibility for its debts or liabilities, beyond their investment in the company.