Sonor Systems Undertakes Its Own Machine Maintenance

Multiple Choice

Sonor Systems undertakes its own machine maintenance. The depreciation on the equipment is $20,000 per year and operating cost is $2 per machine hour. Last year 275,000 machine hours were used to produce 100,000 units. If 300,000 machine hours had been worked last year, what would be the total machine maintenance cost?

A) $600,000
B) $620,000
C) $420,000
D) $220,000