The following data pertains to activity and the cost of cleaning and maintenance for two recent months: The best estimate of the total month 1 variable cost for cleaning and maintenance is:
A)$300
B)$500
C)$800
D)$100

Question

The following data pertains to activity and the cost of cleaning and maintenance for two recent months:  The best estimate of the total month 1 variable cost for cleaning and maintenance is:
A)$300 
B)$500 
C)$800 
D)$100

Quizplus · Accepted Answer

The best estimate of the total month 1 variable cost for cleaning and maintenance can be calculated by taking the difference between the total cost in month 1 and the fixed cost for both months. From the data given, the fixed cost for both months is $500. Therefore, the variable cost for month 1 can be calculated as:
Total cost for month 1 - Fixed cost = $1,300 - $500 = $800. Therefore, the best estimate for the total month 1 variable cost is $800, which is option C.

The Following Data Pertains to Activity and the Cost of Cleaning