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

question 105

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. Develop a cost equation for the total machine maintenance cost.

• A) Y= $275,000
• B) Y = $20,000
• C) Y = $20,000 + $2 MHR
• D) Y = $2 MHR

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