The Following Data Relate to the Torrence Company for May

question 90

Multiple Choice

The following data relate to the Torrence Company for May and August of the current year:

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May and August were the lowest and highest activity levels, and Torrence 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.

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Definitions:

Snowfall

The amount of snow that falls in a specific area during a specific time period.

Normal Model

A statistical model, also known as the normal distribution or bell curve, describing how real-world data tends to be distributed around a mean value.

Snowfall

Precipitation in the form of flakes of crystalline water ice, falling from clouds.

Z

A statistical value representing the number of standard deviations a data point is from the mean in a standard normal distribution.