Runaround corporation sells running shoes and during january they ran production machines for 29,000 hours total and incurred $11,000 in maintenance costs. during july they ran production machines for 10,000 hours total and incurred $8,800 in maintenance costs. based on this data, what are the fixed costs? (round intermediary calculations to the nearest cent.)
a. $24,480
b. $11,000
c. $8,800 d. $7,520

fixed cost =  $7520

so correct option is D. $7,520

Explanation:

given data

January production  = 29,000 hours

maintenance costs = $11,000

July production = 10,000 hours

maintenance costs = $8,800

to find out

what are the fixed costs

solution

we get here first variable cost that is express as

Variable cost per hour =

Variable cost per hour =

Variable cost per hour = $0.12

so fixed cost will be

fixed cost = maintenance costs - January production × Variable cost per hour

fixed cost = $11000 - ( $29000 × $0.12 )

fixed cost =  $7520

so correct option is D. $7,520

answer; property tax payment made in july and december;

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