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Hannah Company had the following cost data available. The Hannah accountant believes that direct labor hours is the correct cost driver to use to predict

Hannah Company had the following cost data available. The Hannah accountant believes that direct labor hours is the correct cost driver to use to predict and manage these costs.

  • $50,000; 15,000 direct labor hours for January
  • $40,000; 12,000 direct labor hours for February
  • $35,000; 10,000 direct labor hours for March
  • $38,000; 11,000 direct labor hours for April

Use the high-low method to compute the total amount of monthly fixed costs for Hannah Company.

  • $5,000
  • $45,000
  • $8,000
  • $15,000

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