Maintenance Costs at a Whetsel Corporation Factory Are Listed Below

Multiple Choice

Maintenance costs at a Whetsel Corporation factory are listed below: Management believes that maintenance cost is a mixed cost that depends on machine-hours. Use the high-low method to estimate the variable and fixed components of this cost. Compute the variable component first and round off to the nearest whole cent. Compute the fixed component second and round off to the nearest whole dollar. These estimates would be closest to:

A) $8.86 per machine-hour; $20,577 per month
B) $0.11 per machine-hour; $48,192 per month
C) $15.48 per machine-hour; $48,103 per month
D) $8.81 per machine-hour; $20,718 per month