Northlake,Inc

question 51

Multiple Choice

Northlake,Inc. ,uses the high-low method to analyze cost behavior.The company observed that at 20,000 machine hours of activity,total maintenance costs averaged $10.50 per hour.When activity jumped to 24,000 machine hours,which was still within the relevant range,the average total cost per machine hour was $9.75.On the basis of this information,the company's fixed maintenance costs were:

• A)$24,000.
• B)$90,000.
• C)$210,00.
• D)$234,000.
• E)an amount other than those listed abovE.

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Definitions:

Trade Acceptance

A draft that is drawn by a seller of goods ordering the buyer to pay a specified sum of money to the seller, usually at a stated time in the future. The buyer accepts the draft by signing the face of the draft, thus creating an enforceable obligation to pay the draft when it comes due. On a trade acceptance, the seller is both the drawer and the payee.

Draft

A preliminary version of a document or an order for payment issued by one party to another.

Buyer

An individual or entity that purchases goods or services from another party in an exchange transaction.

Pay

The monetary compensation received by an individual for their services or work.