Song, Inc, Uses the High-Low Method to Analyze Cost Behavior

question 66

Multiple Choice

Song, Inc., uses the high-low method to analyze cost behavior. The company observed that at 22,000 machine hours of activity, total maintenance costs averaged $33.40 per hour. When activity jumped to 25,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $30.40.
On the basis of this information, the variable cost per machine hour was:

• A) $8.40.
• B) $22.00.
• C) $25.00.
• D) $30.40.
• E) $33.40.

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Definitions:

Communication Technologies

Tools and platforms that facilitate the transfer of information between entities over distances, including the internet, broadcasting media, and telecommunication systems.

Global Village

Refers to the concept of the entire world becoming more interconnected and accessible, making distance less significant in terms of communication and cultural exchange.

Mass Media

Refers to a diverse array of media technologies that reach a large audience via mass communication, including newspapers, television, radio, and the internet.

Johannes Gutenberg

A German blacksmith, goldsmith, printer, and publisher who introduced printing to Europe with his mechanical movable-type printing press.