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

question 93

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, what were total maintenance costs when the company experienced 23,000 machine hours?

• A) $193,200.
• B) $550,000.
• C) $734,800.
• D) $743,200.
• E) $760,000.

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Definitions:

Management of Diabetes

The ongoing process of monitoring and treating diabetes to keep blood sugar levels within a target range and manage symptoms.

Retained Material

Items or substances that remain in the body unintentionally after a procedure or surgery, which can lead to complications.

Direct Observation

Direct Observation involves watching subjects in their natural environment without intervening or altering that environment, to gather data or insights.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome.