We solve this problem by assuming that the relation is
linear. With that, the slope m must be constant with x = machine hours and y = average
maintenance costs, therefore
m = (13,000 – 8,000) / ($1.20 - $1.50) = (13,000 – 10,000)
/ ($1.20 – X)
($1.20 – X) = ($1.20 - $1.50) * (13,000 – 10,000) / (13,000
– 8,000)
$1.20 – X = - $0.30 * 3,000 / 5,000
$1.20 – X = - 0.18
X = $1.38
Therefore total expected maintenance cost is:
Total maintenance cost = $1.38 * 10,000
Total maintenance cost = $13,800
<span>Therefore the answer is closest to the value of $13,440.</span>
