1. Hazel Inc. produces a single product and has a manufacturing capacity of up to 25,000 units per year. Production cost data for Hazel's last two months of operation were as follows:

	November	December
Production in units	4,000	6,000
Production costs incurred	$ 18,000	$ 22,000

Using the high-low method, calculate Hazel's monthly fixed costs.

• A.

  32,000

• B.

  10,000

• C.

  4,000

• D.

  Cannot be determined

2.

Hazel Inc. produces a single product and has a manufacturing capacity of up to 25,000 units per year. Production cost data for Hazel's last two months of operation were as follows:

	November	December
Production in units	4,000	6,000
Production costs incurred	$ 18,000	$ 22,000

Predict the production costs of next month (January), which is expected to produce 7,000 units.

• A.

  25,000

• B.

  Cannot be determined

• C.

  24,000

• D.

  23,000