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 2,700 units and 12,000 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
	5,400	units		$	4			$	7			$	5			$	16
	8,100	units			5				9				4				18

The cost formula that expresses the behavior of Shums total cost is:

Multiple Choice

• Y = $0 + $16X.

• Y = $21,600 + $18X.

• Y = $48,600 + $7X.

• Y = $37,800 + $4X.

• Y = $54,000 + $6X.