Question - The Wiscow Manufacturing Company recorded overhead costs of $21,500 at an activity level of 5,000 machine hours and $8,000 at 2,500 machine hours. The records also indicated that overhead of $10,000 was incurred at 4,200 machine hours. Using the high-low method to estimate the cost equation, determine the variable cost per machine hour.
A. $5.40
B. $14.38
C. $1.18
D. $4.60