Question
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
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 fixed) and lubrication totals 72,000 (all variable). The remaining 88,000 of the total overhead cost consists of utility cost (mixed). 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. The total fixed overhead costs for Blaine Company are most likely closest to:
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