Simon Company's High and Low Level of Activity Last Year

Multiple Choice

Simon Company's high and low level of activity last year was 60,000 units of product produced in May and 20,000 units produced in November. Machine maintenance costs were $78,000 in May and $30,000 in November. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 45,000 units.

A) $67,500
B) $72,000
C) $58,500
D) $60,000