In the O’Donnell Manufacturing Company, at an activity level of 80,000 machine hours, total overhead costs were
$223,000. Of this amount, utilities were $48,000 (all variable) and depreciation was $60,000 (all fixed). The balance of the overhead cost consisted of maintenance cost (mixed). At 100,000 machine hours, maintenance costs were $130,000.
Assume that all of the activity levels mentioned in this problem are within the relevant range.
-The variable cost for maintenance per machine hour is?
A)$1.35.
B)$1.30.
C)$0.75.
D)$1.44.
