Question

Which of the following is the total mixed cost equation for a factory where machine operating costs include $300,000 of machine depreciation per year, plus $70 of utility costs for each day the machinery is in operation?

		Y = $300,000 + $70X
		Y = 300,000X
		Y = $70X
		Y = $300,000 - $70X
		None of the answer choices is correct.

.

Answer 1

Option 1 is correct

Equation would be

Total Cost = Fixed Cost + Variable cost per day

let no of days be x

Total Cost = $300000 + $70 * X

Total Cost = $300000 + $70X

e.g. For 10 days answer would be $300000 + $70*10 = $300000 + $700 = $300,700

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