Question

A company has the following activities and costs: machine setup of $500,000; machine repair of $100,000; and heating and lighting of $250,000. Using this information, factory utilities are $ ______ .

Answer 1

Answer:

250,000

Explanation:

The cost of consumption in a period is defined as utility cost.

Machine setup cost is actually a capital expense and Machine repair cost is needed to maintain the operations/working of the machine.

The only consumption in this example is Heating and lighting cost. The electricity / Gas is used for this purpose.