Reference no: EM131772388

Question 1 - Hitchcock, inc. uses the high-low method to analyze cost behavior. The company observed that at 12,000 machine hours of activity, total maintenance costs averaged $7.00 per hour. When activity jumped to 15,000 machine hours, which was still within the relevant range, the average cost per machine hour totaled $6.40. On the basis of this information, the variable cost per machine hour was:

a. $4.00

b. $6.40

c. $6.70

d. $7.00

e. an amount other than listed

Question 2 - Northridge, Inc., uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average cost per machine hour totaled $9.75. On the basis of this information, the company's fixed maintenance costs were:

a. $24,000

b. $90,000

c. $210,000

d. $234,000

e. an amount other than listed