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. What is the total maintenance cost per unit produced?

A) $0.55
B) $4.20
C) $5.50
D) $5.70