The Blaine Company Is a Highly Automated Manufacturer

question 10

Multiple Choice

The Blaine Company 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.
-If 7,800 setups are projected for the next period, total expected overhead cost would be closest to

• A)£156,000.
• B)£236,000.
• C)£214,400.
• D)£276,000.

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Definitions:

Higher Amount

A term that refers to a value that is greater when compared with another quantity or measure.

Specific Identification

A method of inventory valuation that tracks the actual cost of each specific item in inventory.

Grocery Store

A grocery store is a retail establishment that sells food and other household goods.