The Maintenance Expenses of a Company Are to Be Analyzed

question 43

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: Highest and Lowest: Cost per month $86,000 and $74,000;Machine hours 96,000 and 66,000.
Using the high-low-point method of analysis,the estimated variable cost per machine hour is:

• A)$0.40
• B)$0.20
• C)$0.90
• D)$0.10
• E)$0.70

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