Wofril Corporation uses the cost formula Y = $5,300 + $0.60X for the maintenance cost, where X is machine-hours. The August budget is based on 8,000 hours of planned machine time. Maintenance cost expected to be incurred during August is:
A) $10,100
B) $4,800
C) $500
D) $5,300

Question

Quizplus · Accepted Answer

Substitute the given value of X (8,000 hours) in the cost function:
Y = $5,300 + $0.60(8,000)
Y = $5,300 + $4,800
Y = $10,100
Therefore, the maintenance cost expected to be incurred during August is $10,100.

Wofril Corporation Uses the Cost Formula Y = $5,300