The following data relate to the Torrence Company for May and August of the current year:

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May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. Which of the following statements is true?
A) The variable maintenance cost is $43 per hour.
B) The variable maintenance cost is $45 per hour.
C) The variable maintenance cost is $47 per hour.
D) The fixed maintenance cost is $725,000 per month.
E) More than one of the other answers is true.

Question

The following data relate to the Torrence Company for May and August of the current year:

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May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. Which of the following statements is true?
A) The variable maintenance cost is $43 per hour. 
B) The variable maintenance cost is $45 per hour. 
C) The variable maintenance cost is $47 per hour. 
D) The fixed maintenance cost is $725,000 per month. 
E) More than one of the other answers is true.

Quizplus · Accepted Answer

The Answer of The following data relate to the Torrence Company for May and August of the current year:

-
May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. Which of the following statements is true?
A) The variable maintenance cost is $43 per hour. 
B) The variable maintenance cost is $45 per hour. 
C) The variable maintenance cost is $47 per hour. 
D) The fixed maintenance cost is $725,000 per month. 
E) More than one of the other answers is true.

The Following Data Relate to the Torrence Company for May