At an Activity Level of 6,000 Units,the Cost for Maintenance

question 109

Multiple Choice

At an activity level of 6,000 units,the cost for maintenance is $7,200; at 10,000 units,the cost for maintenance is $11,600.Using the high-low method,what is the cost formula for maintenance?

• A) $1.16 per unit.
• B) $1.20 per unit.
• C) $600 plus $1.10 per unit.
• D) $1,200 plus $1.10 per unit.

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Definitions:

Compounded Semi-annually

Interest calculation method where interest is added to the principal sum of a deposit or loan every six months, leading to interest on interest.

Private Loan

A loan sourced from a private entity or individual, as opposed to a government or public lender.

Accrued Interest

Interest that has been incurred but not yet paid, typically relating to bonds or loans.

Pay Off

To completely settle a debt or an obligation.