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The Following Data Relate to the Lyle Company for May

Question 36

Multiple Choice

The following data relate to the Lyle Company for May and August of the current year:  May  August  Maintenance hours 25,00029.000 Maintenance cost $1.175,000$1,247,000\begin{array} { | l | c | c | c | } \hline & \text { May } & & \text { August } \\\hline \text { Maintenance hours } & 25,000 & & 29.000 \\\hline \text { Maintenance cost } & \$ 1.175,000 & & \$ 1,247,000 \\\hline\end{array} May and August were the lowest and highest activity levels, and Lyle uses the high-low method to analyze cost behaviour. 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 $1,725,000 per month.
E) The variable maintenance cost is $18 per hour and the fixed maintenance cost is $725,000.

Correct Answer:

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