Smith Company Is Attempting to Develop the Cost Function for Repair

question 22

Multiple Choice

Smith Company is attempting to develop the cost function for repair costs. The following past data are available: $\begin{array}{lr}\text { Machine Hours }&\text {Repair Costs }\\4,800 & \$ 6,385 \\3,400 & 4,585 \\4,000 & 5,285 \\5,900 & 7,085\end{array}$ Using the high-low method, what is the fixed repair cost?

• A) $1,185
• B) $850
• C) $475
• D) $565

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