7. The Johnson Furniture Company has the following information available regarding costs at various levels of monthly production: Production volume (units) Direct materials Direct labor Indirect materials Supervisors' salaries Depreciation on plant and equipment Maintenance Utilities Insurance on plant and equipment Property taxes on plant and equipment Total 8,000 Units $35,000 33,000 10,500 6,000 5,000 16,000 7,500 800 11,000 Units $50,000 45,000 15,000 6,000 5,000 22,000 10,500 800 1,000 1,000 $114,800 $155,300 Develop an equation for total monthly production costs using the high-low method of cost estimation, and predict total costs for a monthly production volume of 18,000 units. 8. The Illinois Tools Machine Shop wants to develop a cost estimating equation for its monthly cost of electricity. It has the following data: Cost of Electricity Month Direct Labor-Hours (X) January April July October $7,000 $7,500 $8,500 $7,250 750 850 1,000 800 What would be the best equation using the high-low method? A) Y = $2,000+ $4X B) Y = $2,500 + $6X C) Y = $1,500 + $8X Y = $500 + $6X