Bell Company Has Provided the Following Data for Maintenance Costs

question 68

Multiple Choice

Bell Company has provided the following data for maintenance costs: Using the high-low method,the cost formula for maintenance cost is?

• A) $1.625 per machine hour.
• B) $2.00 per machine hour.
• C) $18,000 plus $0.50 per machine hour.
• D) $24,000 plus $0.50 per machine hour.

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Definitions:

Incremental Net Operating Income

The difference in net operating income between two alternatives.

Depreciated

Refers to the decrease in the value of an asset over time due to wear and tear or obsolescence.

Sales Revenues

The total amount of money generated from the sale of goods or services before any costs or expenses are deducted.

Cash Operating Expenses

The expenses a company incurs during its day-to-day operational activities, paid in cash, such as rent, utilities, and salary payments.