The Blaine Corporation is a highly automated manufacturer. At an activity level of 6,000 machine setups, total overhead costs equal $240,000. Of this amount, depreciation totals $80,000 (all fixed) and lubrication totals $72,000 (all variable). The remaining $88,000 of the total overhead cost consists of utility cost (mixed). At an activity level of 9,000 setups, utility cost totals $112,000.Assume that the relevant range includes all of the activity levels mentioned in this problem. The total fixed overhead costs for Blaine Corporation are most likely closest to:
A. $ 80,000
B. $ 40,000
C. $120,000
D. $112,000
Answer: C
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