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 2,000 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
	4,000	units		$	5			$	8			$	7			$	20
	6,000	units			5				7				5				17

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

Multiple Choice

• Y = $0 + $20X.

• Y = $20,000 + $17X.

• Y = $48,000 + $8X.

• Y = $32,000 + $5X.

• Y = $56,000 + $6X.