The following data relate to the Hodges Company for May and August of the current year:

	May		August
Maintenance hours	10,000		12,000
Maintenance cost	$260,000		$300,000

May and August were the lowest and highest activity levels, and Hodges uses the high-low method to analyze cost behavior. Which of the following statements is true?

A. The variable maintenance cost is $25 per hour.

B. The variable maintenance cost is $25.50 per hour.

C. The variable maintenance cost is $26 per hour.

D. The fixed maintenance cost is $60,000 per month.

E. More than one of the above statements is true.

Answer: D

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