The following data relate to the Torrence Company for May and August of the current year: May AugustMaintenance hours 25,000   29,000 Maintenance cost$1,175,000  $1,247,000 May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. Which of the following statements is true?

A. The fixed maintenance cost is $725,000 per month.
B. The variable maintenance cost is $47 per hour.
C. The variable maintenance cost is $43 per hour.
D. The variable maintenance cost is $45 per hour.
E. More than one of the other answers is true.


Answer: A

Business

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