The Crater Manufacturing Company Recorded Overhead Costs of $14,182 at an Activity

The Crater Manufacturing Company recorded overhead costs of $14,182 at an activity level of 4,200 machine hours and $8,748 at 2,300 machine hours. The records also indicated that overhead of $9,730 was incurred at 2,600 machine hours. What is the variable cost per machine hour using the high-low method to estimate the cost equation?

A) $2.78.
B) $2.86.
C) $3.10.
D) $3.38.

Correct Answer:

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