Using the highest and lowest levels of activity for the past year, the cost function representing maintenance costs (y) as a function of machine hours (x) was developed: y=439,000 + 14x. The lowest level of machine hours last year was 4000. The maintenance cost incurred at the highest and lowest level of machine hours were P551,000 and P495,000, respectively. If 5975 machine hours were used the following month, what amount maintenance cost can the company expect? a. 439,000 b. 495,000 c. 551,000 d. 522,650

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Using the highest and lowest levels of activity for the past year, the cost function representing maintenance costs (y) as a function of machine hours (x) was developed: y=439,000 + 14x. The lowest level of machine hours last year was 4000. The maintenance cost incurred at the highest and lowest level of machine hours were P551,000 and P495,000, respectively. If 5975 machine hours were used the following month, what amount maintenance cost can the company expect?

a. 439,000
b. 495,000
c. 551,000
d. 522,650

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