Answer (C) is correct . The maintenance cost is a mixed cost containing both fixed and variable elements. To calculate the monthly total fixed costs, divide the annual amount by 12. Monthly fixed maintenance costs: $6,000/12 = $500 Variable maintenance costs: 30,000*$0.70/hour = 21,000 Total maintenance costs $21,500

Answer (A) is incorrect because The amount of $20,500 maintenance cost is arrived at by subtracting the $500 fixed costs per month from the $21,000 variable costs. Answer (B) is incorrect because The amount of $21,000 only includes the variable maintenance costs.
Answer (D) is incorrect because The amount of $27,000 is determined by adding annual fixed maintenance costs of $6,000 to variable maintenance costs for the month of $21,000. Fixed maintenance costs for the month should be added instead.
Answer (B) is incorrect because The amount of $21,000 only includes the variable maintenance costs.
Answer (D) is incorrect because The amount of $27,000 is determined by adding annual fixed maintenance costs of $6,000 to variable maintenance costs for the month of $21,000. Fixed maintenance costs for the month should be added instead.