Figure 3-1 Sonor Systems Undertakes Its Own Machine Maintenance

Multiple Choice

Figure 3-1 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.
See Figure 3-1. Develop a cost equation for the total machine maintenance cost.

A) Y= $275,000
B) Y = $20,000
C) Y = $20,000 + $2 MHR
D) Y = $2 MHR