Assume that variable manufacturing overhead is allocated according to machine-hours. Aladdin Company expects to produce 400 cases of Product A using 400 machine-hours. Each machine hour is expected to take 10 KWH of electricity, which costs $6 per KWH. What is the maximum amount the company would be willing to pay for the new machine based solely on rate and efficiency variances if a new energy-efficient machine only used 8 KWH per machine-hour?

Question 24Select one:

a.

$4,680

b.

$4,120

c.

$4,800

d.

$120

e.

$4,920