High-Low Method, Cost Formulas The controler of the South Charleston plant of Ravin, Inc., monitored activities associated with material handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different levels, are presented as follows: Resource Number of Moves Total Cost For depreciation Low 4,000 $2,200 High 15,000 2,200 Indirect labor Low 4,000 564,200 High 15,000 117,000 Fuel and oil for for Low 4,000 $3,000 High 15,000 11,250 Required: If required, round your answers to two decimal places. Enter a "0" if required. 1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components. Forklift depreciation: V 0 F Y Indirect labor: V F Y Fuel and oil for forklift: V F Y X 2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 9,000 moves. Forklift depreciation Indirect labor Fuel and oil for fordi 3. Construct a cost formula that can be used to predict the total cost of the three resources combined. If required, round your answers to two decimal places. Materials handling costs x Using this formula, predict the total materials handling cost if activity output is 9,000 moves Y