Maintenance Expenses of a Company Are to Be Analyzed for Purposes

Multiple Choice

Maintenance expenses of a company are to be analyzed for purposes of constructing a flexible budget. Examination of past records disclosed the following costs and volume measures: $\begin{array}{lrr} & \text { Highest } & \text { Lowest } \\\text { Cost per month } & \$ 42,000 & \$ 34,000 \\\text { Machine hours } & 46,000 & 30,000\end{array}$ Using the high-low technique, estimate the annual fixed cost for maintenance expenditures:

A) $447,000.
B) $240,000.
C) $230,000.
D) $384,000.
E) $228,000.