The cost formula for the maintenance department of Rainbow, Ltd., is $19,400 per month plus $7,70 per machine hour used by the production department.
Required:
a. Calculate the maintenance cost that would be budgeted for a month in which 6,700 machine hours are planned to b used.
b. Prepare and appropriate performance report for the maintenance department assuming that 7,060 machine hours were actually used in the monthly of May and that the total maintenance cost incurred was $68,940?