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The Following Data Relate to the Lisle Company for May

Question 46

Multiple Choice

The following data relate to the Lisle 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}{lrr} & \text { May } & \text { August } \\\text { Maintenance hours } & 25,000 & 29,000 \\\text { Maintenance cost } & \$ 1,175,000 & \$ 1,247,000\end{array} May and August were the lowest and highest activity levels, and Lisle 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.

Correct Answer:

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