An Analysis of Past Maintenance Costs Indicates That Maintenance Cost

Multiple Choice

An analysis of past maintenance costs indicates that maintenance cost is an average of $0.20 per machine-hour at an activity level of 10,000 machine-hours and $0.25 per machine-hour at an activity level of 8,000 machine-hours. Assuming that this activity is within the relevant range, what is the total expected maintenance cost if the activity level is 8,700 machine-hours?

A) $2,000
B) $400
C) $2,250
D) $1,740