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The following data relate to the Torrence Company for the months of May and August...

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Accounting

The following data relate to the Torrence Company for the months of May and August for the current year:
May August
Maintenance 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. Expected maintenance hours for October is 26,000. Which of the following statements is true?
A.

The variable maintenance cost is $43 per hour
B.

The predicted maintenance cost for October is $1,211,000
C.

The variable maintenance cost is $45 per hour
D.

The predicted maintenance cost for October is $1,193,000
E.

The predicted maintenance cost for October is $1,275,000

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