Song, Inc, Uses the High-Low Method to Analyze Cost Behavior

Multiple Choice

Song, 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 variable cost per machine hour was:

A) $8.40.
B) $22.00.
C) $25.00.
D) $30.40.
E) $33.40.