Question: Swan, Inc. uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $32.90

Swan, Inc. uses the high-low method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $32.90 per hour. When activity jumped to 26,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $26.90. On the basis of this information, the fixed cost for Swan was: (Round your intermediate calculations to 2 decimal places and final answer to nearest dollar amount.)

Multiple Choice

$699,400.
$180,000.
$658,000.
$138,000.
$520,000.

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