The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year:

	Machine Hours				Direct Labor Costs
Busiest month (June)		14,000			$	200,000
Slowest month (December)		6,000			$	120,000

If Macon expects to use 10,000 machine hours next month, what are the estimated direct labor costs?

Multiple Choice

• $160,000.

• $180,000.

• $175,000.

• $150,000.