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The cost formula for the maintenance department of Rainbow, Ltd., is $12,600 per month plus $4.50 per machine hour used by the production department.
Required:
A. Calculate the maintenance cost that would be budgeted for a month in which 15,200 machine hours are planned to be used.
B. Prepare an appropriate performance report for the maintenance department assuming that 16,120 machine hours were actually used in the month of June and the total maintenance cost incurred was $83,650.
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