Question: RR Company uses the high-low method to analyze cost behavior. The company observed that at 2,000 machine hours of sctivity, total maintenance costs averaged P40.00

RR Company uses the high-low method to analyze cost behavior. The company observed that at 2,000 machine hours of sctivity, total maintenance costs averaged P40.00 per hour. When activity jumped to 6,000 machine hours, the average cost per machine hour totaled P35. If thr number of machine hours would exceed 5,000, fixed cost would increase by P20,000. On the other hand, if it will be below 1,000 machine hours, fixed cost would decrease by P10,000. But, regardless of the number of machine hours, variable cost per unit remains constant.

1. If RR plans to incur 5,300 machine hours, the total cost would be?

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