Answer (C) is correct . The expected total cost for any activity level can be found using the following formula: Expected total cost = Expected fixed cost + Expected variable cost = $160 + (1,400 hours ¡Á $.40 per hour) = $160 + $560 = $720
Answer (A) is incorrect because The variable cost is $560, not the total cost.
Answer (B) is incorrect because The expected total cost for May is not $650.
Answer (D) is incorrect because The expected total cost for May is not $760.
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