The Following Data Relate to the Lyle Company for May

question 26

Multiple Choice

The following data relate to the Lyle Company for May and August of the current year: $\begin{array} { | l | c | c | c | } \hline & \text { May } & & \text { August } \\\hline \text { Maintenance hours } & 25,000 & & 29.000 \\\hline \text { Maintenance cost } & \$ 1.175,000 & & \$ 1,247,000 \\\hline\end{array}$ May and August were the lowest and highest activity levels, and Lyle uses the high-low method to analyze cost behaviour. Which of the following statements is true?

• A)The variable maintenance cost is $43 per hour.
• B)The variable maintenance cost is $45 per hour.
• C)The variable maintenance cost is $47 per hour.
• D)The fixed maintenance cost is $1,725,000 per month.
• E)The variable maintenance cost is $18 per hour and the fixed maintenance cost is $725,000.

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