1. Fulton and Sons, Inc. presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Fulton made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.How much would Fulton pay if it made 5,500 copies? a. $300.b. $322.c. $292.50.d. $382.50.e. None of the answers is correct. 2. The following data relate to the Torrence Company for May and August: May AugustMaintenance hours 25,000 29,000 Maintenance cost$1,175,000 $1,247,000 May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. If maintenance hours are estimated to be 26,000 hours in October, which of the following statements is true? a. The fixed maintenance cost is $72,000 per month.b. The variable maintenance cost is $22 per hour.c. The variable maintenance cost is $18 per hour.d. The variable maintenance cost is $24 per hour.e. More than one of the other answers is true

Cost of Production: The complete cost spent by a firm to either manufacture a product or provide…

Answered: Fulton and Sons, Inc. presently leases…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EB: Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month...

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1. Fulton and Sons, Inc. presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Fulton made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs.

How much would Fulton pay if it made 5,500 copies?

a. $300.

b. $322.

c. $292.50.

d. $382.50.

e. None of the answers is correct.

2. The following data relate to the Torrence Company for May and August:

	May		August
Maintenance hours		25,000			29,000
Maintenance cost	$	1,175,000		$	1,247,000

May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. If maintenance hours are estimated to be 26,000 hours in October, which of the following statements is true?

a. The fixed maintenance cost is $72,000 per month.

b. The variable maintenance cost is $22 per hour.

c. The variable maintenance cost is $18 per hour.

d. The variable maintenance cost is $24 per hour.

e. More than one of the other answers is true

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