The Maintenance Expenses of a Company Are to Be Analyzed

question 20

Multiple Choice

The maintenance expenses of a company are to be analyzed for purposes of constructing a flexible budget.Examination of past records disclosed the following costs and volume measures:
Using the high-low-point method of analysis,the estimated variable cost per machine hour is:

• A)$1.25.
• B)$12.50.
• C)$0.80.
• D)$0.08. Unit variable cost = ($39,200 - $32,000)/(24,000 - 15,000)= $0.80