Question
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 2,400 units and 15,000 units per month. Per-unit costs at two different activity levels for each cost type are presented below.
| Type A | Type B | Type C | Total | |||||||||||||||
| 4,800 | units | $ | 5 | $ | 8 | $ | 7 | $ | 20 | |||||||||
| 7,200 | units | 6 | 8 | 5 | 19 | |||||||||||||
The cost formula that expresses the behavior of Shums total cost is:
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Essentials Of Business Statistics
Authors: Bruce Bowerman, Richard Connell, Emily Murphree, Burdeane Or
5th Edition
978-1259688867, 1259688860, 78020530, 978-0078020537
