Determine the variable cost per setup for utilities

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Point 1: The Blaine Company is a highly automated manufacturer. At an activity level of 6,000 machine setups, total overhead costs equal $240,000. Of this amount, depreciation totals $80,000 {all ?xed} and lubrication totals $?2,000 {all variable).

Point 2: The remaining $88,000 of the total overhead cost consists of utility cost {mixed}.

Point 3: At an activity level of 9,000 setups, utility cost totals $112,000. Assume that the relevant range includes all of the activity levels mentioned in this problem.

Question 1: The variable cost per setup for utilities is most likely closest to:

A) $ 6.00 per setup.

b) $12.44 pet setup.

C) $4.00 per setup.

D) $14.66 per setup.

Reference no: EM132479116

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