Figure 3-1 ALF Systems Undertakes Its Own Machine Maintenance

Multiple Choice

Figure 3-1 ALF 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.
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See Figure 3-1.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