Hifi Company Wants to Develop a Cost Function for Its

question 106

Multiple Choice

Hifi Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available: $$\begin{array} { | l | l | l | } \hline \text { Manth } & \text { Machine Hours } & \begin{array} { l } \text { Maintenance Costs } \\\text { Incurred }\end{array} \\\hline \text { January } & \mathbf { 8 0 0 0 } & \mathbf { \$ 3 , 6 0 0 } \\\hline \text { February } & 13000 & \$ 5,300 \\\hline \text { March } & 14000 & \$ 6,000 \\\hline \text { April } & 11000 & \$ 4,600 \\\hline\end{array}$$ Using the high-low method, what is the variable maintenance cost per machine hour?

• A) $0.30
• B) $0.40
• C) $0.20
• D) $2.50

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Definitions:

Golden Mean

In philosophy, particularly Aristotelian ethics, the desirable middle between two extremes, one of excess and the other of deficiency.

Principle

A fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.

Moderation

The quality of being moderate and avoiding extremes in behavior or expression, advocating for balance and restraint.

Spheres Of Existence

Conceptual domains within life that separate different aspects of experience, such as public, private, or professional spheres.