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 fixed cost was:

A) $184,800.
B) $210,000.
C) $550,000.
D) $734,800.
E) $760,000.