Question

Voyager Corporation has developed the following cost formula for its maintenance cost: Y = $300 + $2X, where X = the number of direct labor hours incurred. Assuming that the company expects 1,350 direct labor hours to be incurred during July, what maintenance cost would it expect?

Answer 1

Answer:

$3,000

Explanation:

Data provided in the question:

Maintenance cost formula : Y = $300 + $2X

Here,

Y is the maintenance cost

X is the number of direct labor hours

Expected direct labor hours = 1,350

Now,

The using the Maintenance cost formula given in the question, maintenance cost for 1,350 labor hours i.e value of Y for X = 1,350

⇒ Y = $300 + $2(1,350)

or

⇒ Y = $300 + $2,700

or

⇒ Y = $3,000