At Overland Company, maintenance cost is exclusively a variable cost that varies directly with machine-hours. The performance report for July showed that actual maintenance costs totalled $9,800 and that the associated spending variance was $200 unfavourable. If 8,000 machine-hours were actually worked during July, the budgeted maintenance cost per machine-hour was: a. $1.20. b. $1.25. c. $1.275. d. $1.225