The Following Data Relate to the Torrence Company for May

question 16

Multiple Choice

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

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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. If maintenance hours are estimated to be 26,000 hours in October, which of the following statements is true?

• A) The variable maintenance cost is $18 per hour.
• B) The variable maintenance cost is $22 per hour.
• C) The variable maintenance cost is $24 per hour.
• D) The fixed maintenance cost is $72,000 per month.
• E) More than one of the other answers is true.

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Definitions:

Philosophy

The study of fundamental questions regarding existence, knowledge, values, reason, mind, and language through logical reasoning and systematic argument.

Disputing Irrational Beliefs

A cognitive therapeutic technique aimed at challenging and changing irrational thoughts held by clients.

Effective New Philosophy

A novel mindset or approach that proves to be successful in bringing about desired outcomes or solving problems.

Irrational Beliefs

Faulty thinking patterns that are unrealistic or illogical and often cause emotional distress or unhealthy behaviors.