Retleb Manufacturing Company noticed that, during its busiest month of 20xx, maintenance costs totaled $15,400, resulting from the production of 32,000 units. During its slowest month, $12,600 in maintenance costs were incurred, resulting from the production of 24,000 units. Using the high-low method, what maintenance cost would the company expect to incur at a volume of 20,000 units?
A) $7,000
B) $11,200
C) $8,400
D) $2,800

Question

Quizplus · Accepted Answer

The variable maintenance cost per unit is ($15,400 - $12,600) / (32,000 - 24,000) = $0.70. Therefore, the maintenance cost at a volume of 20,000 units would be $0.70 * 20,000 = $11,200.

Retleb Manufacturing Company Noticed That, During Its Busiest Month of 20xx