The maintenance expenses of a company are to be analyzed for purposes of constructing a flexible budget. Examination of past records disclosed the following costs and volume measures: Highest and Lowest: Cost per month $86,000 and $74,000; Machine hours 96,000 and 66,000.
Using the high-low-point method of analysis, the estimated variable cost per machine hour is:
a) $0.40
b) $0.20
c) $0.90
d) $0.10