Swan, IncUses the High-Low Method to Analyze Cost Behavior

Multiple Choice

Swan, 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, the fixed cost for Swan was:

A) $184,800.
B) $210,000.
C) $550,000.
D) $734,800.
E) $760,000.