Northridge Inc

Multiple Choice

Northridge Inc., uses the high-low method to analyze cost behaviour. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which is still within the relevant range, the total maintenance costs averaged $9.75 per machine hour. On the basis of this information, the company's fixed maintenance costs are:

A) $20,000.
B) $24,000.
C) $90,000.
D) $210,000.
E) $234,000.