Cosco, Inc.

has accumulated the following data for the cost of maintenance on its
machinery for the last four months:

M o n th M a in te n a n c e C o s t M a c h in e H o u r s
S e p te m b e r $ 2 6 ,0 2 0 2 1 ,0 0 0
O c to b e r $ 2 4 ,6 0 0 1 8 ,5 0 0
N ovem ber $ 2 2 ,3 0 0 1 5 ,0 0 0
D ecem ber $ 2 5 ,1 0 0 1 9 ,0 0 0

Assume that the relevant range includes all of the activity levels mentioned in this
problem

4. Assuming Cosco Company uses the high-low method of analysis, if machine hours are
budgeted to be 20,000 hours then the budgeted total maintenance cost would be
expected to be:
A) $25,400
B) $25,560
C) $23,700
D) $24,720