Figure 3-5.Maxwell Company makes treadmills. The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory. Data for the past four months were collected.
-Refer to Figure 3-5. What would Maxwell Company's estimate of total janitorial cost be at a level of 600 machine hours?
A) $11,280
B) $7,500
C) $4,080
D) $6,120

Question

Figure 3-5.Maxwell Company makes treadmills. The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory. Data for the past four months were collected. 
-Refer to Figure 3-5. What would Maxwell Company's estimate of total janitorial cost be at a level of 600 machine hours?
A) $11,280 
B) $7,500 
C) $4,080 
D) $6,120

Quizplus · Accepted Answer

Maxwell Company's total janitorial cost is estimated to be $11,280 at a level of 600 machine hours. This is because the fixed cost is $4,080 and the variable cost is $7,200 (600 machine hours * $12 per machine hour).