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At Eady Corporation, maintenance is a variable overhead cost that is based on machine-hours. The performance report for July showed that actual maintenance costs totaled $10,110 and that the associated rate variance was $310 unfavorable. If 5,600 machine-hours were actually worked during July, the standard maintenance cost per machine-hour was:

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Cricetus

Answer:

"$1.75" is the appropriate approach.

Explanation:

The given values are:

Rate variance

= $310 (unfavorable)

Actual maintenance costs

= $10,110

Machine hours

= 5,600

Now,

⇒  [tex]Rate \ variance=(5600\times Standard \ maintenance \ cost \ per \ machine \ hour)-(Actual \ maintenance \ cost)[/tex]

On substituting the values, we get

⇒  [tex]-310=(5600\times Standard \ maintenance \ cost \ per \ machine \ hour)-10110[/tex]

⇒  [tex]Standard \ maintenance \ cost \ per \ machine \ hour=\frac{10110-310}{5600}[/tex]

⇒                                                                             [tex]=\frac{9,800}{5600}[/tex]

⇒                                                                             [tex]=1.75[/tex] ($)

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