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

question 148

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. What is the total maintenance cost per unit produced?

• A) $0.55
• B) $4.20
• C) $5.50
• D) $5.70

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Definitions:

Consumption Function

An economic equation that links the total consumption to the gross national income.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income, predicting consumer spending behavior.

Aggregate Income

The total income earned by all individuals within an economy, including wages, profits, and other earnings.

Consumption Function

A formula in economics showing how total consumption is related to the gross national income.