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Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three different cost types (A, B, and C) and has
Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,500 units and 10,000 units per month. Per-unit costs at two different activity levels for each cost types are presented below.
Types AType BType CTotal
5,000units$5$12$5$22
7,500units58417
If Shum produces 10,000 units, the total cost would be:
Choices are:
- $71,000.
- $42,000.
- $145,000.
- $77,000.
- None of the answers is correct.
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