Buckeye Company has provided the following data for maintenance costs: Prior Year Current Year Machine hours 19,100 22,200 Maintenance cost $30,500 $34,220 Required: The best estimate of the cost formula for maintenance would be: (Do not round intermediate calculations. Round your Variable cost per unit to 2 decimal places.) a) $7,580 per year plus $.833 per machine hour. b) $26,640 per year plus $.833 per machine hour. c) $7,580 per year plus $1.20 per machine hour. d) $30,500 per year plus $1.20 per machine hour.
Buckeye Company has provided the following data for maintenance costs: Prior Year Current Year Machine hours 19,100 22,200 Maintenance cost $30,500 $34,220 Required: The best estimate of the cost formula for maintenance would be: (Do not round intermediate calculations. Round your Variable cost per unit to 2 decimal places.) a) $7,580 per year plus $.833 per machine hour. b) $26,640 per year plus $.833 per machine hour. c) $7,580 per year plus $1.20 per machine hour. d) $30,500 per year plus $1.20 per machine hour.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Buckeye Company has provided the following data for
maintenance costs:
Prior Year Current Year
Machine hours
19,100
22,200
Maintenance cost $30,500
$34,220
Required:
The best estimate of the cost formula for maintenance
would be: (Do not round intermediate calculations.
Round your Variable cost per unit to 2 decimal places.)
a) $7,580 per year plus $.833 per machine hour.
b) $26,640 per year plus $.833 per machine hour.
c) $7,580 per year plus $1.20 per machine hour.
d) $30,500 per year plus $1.20 per machine hour.
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