High-Low Method, Cost Formulas The controller of the South Charleston plant of Ravinia, Inc, monitored activities associated with materials 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 Forklift depreciation Low 5,000 $3,100 High 16,000 3,100 Indirect labor Low 5,000 $55,000 High 16,000 103,400 Fuel and oil for forklift Low 5,000 $3,650 High 16,000 11,680 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: Vs 0 FS 3,100 Y 3,100 Indirect labor: Vs 4.4 33,000 33,000 + S 4.4 x Fuel and oil for forklift: Vs 0.73 o Y $ 0.73 x 2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 10,000 moves. Forklift depreciation Indirect labor $ 3,100 77,000 7,300 Fuel and oil for forklift s 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 cost 36,100 V + Using this formula, predict the total materials handling cost if activity output is 10,000 movet. X Y