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: $\begin{array}{lrr} & \text { Highest } & \text { Lowest } \\\text { Cost per month } & \$ 86,000 & \$ 74,000 \\\text { Machine hours } & 96,000 & 66,000\end{array}$ Using the high-low-point method of analysis, the estimated variable cost per machine hour is:

A) $0.40
B) $0.20
C) $0.90
D) $0.10
E) $0.70