The following data relate to the Torrence Company for May and August:

May Maintenance hours39,000

August Maintenance Hours45,000

May Maintenance cost$1,277,000

August Maintenance Cost $1,397,000

May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. If maintenance hours are estimated to be 42,000 hours in October, which of the following statements is true?

Multiple Choice

• The variable maintenance cost is $22 per hour.
• The variable maintenance cost is $20 per hour.
• The variable maintenance cost is $25 per hour.
• More than one of the other answers is true.
• The fixed maintenance cost is $120,000 per month.