The Following Data Relate to the Torrence Company for May

Multiple Choice

The following data relate to the Torrence Company for May and August:

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May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. If maintenance hours are estimated to be 26,000 hours in October, which of the following statements is true?

A) The variable maintenance cost is $18 per hour.
B) The variable maintenance cost is $22 per hour.
C) The variable maintenance cost is $24 per hour.
D) The fixed maintenance cost is $72,000 per month.
E) More than one of the other answers is true.