Figure 3-1 Sonor Systems Undertakes Its Own Machine Maintenance. the Depreciation on Depreciation

question 102

Multiple Choice

Figure 3-1
Sonor 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.
-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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