Cortez Manufacturing reports that at an activity level of 5,000 direct labor hours in a month, its total variable maintenance cost is $312,500 and its total fixed maintenance cost is $125,000. What would be the total variable maintenance cost at an activity level of 5,300 direct labor hours in a month? Assume that this level of activity is within the relevant range.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 1PB: Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven...
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Cortez Manufacturing reports that at an activity level of 5,000 direct labor
hours in a month, its total variable maintenance cost is $312,500 and its
total fixed maintenance cost is $125,000. What would be the total variable
maintenance cost at an activity level of 5,300 direct labor hours in a
month? Assume that this level of activity is within the relevant range.
Transcribed Image Text:Cortez Manufacturing reports that at an activity level of 5,000 direct labor hours in a month, its total variable maintenance cost is $312,500 and its total fixed maintenance cost is $125,000. What would be the total variable maintenance cost at an activity level of 5,300 direct labor hours in a month? Assume that this level of activity is within the relevant range.
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