Question
Yang Manufacturing, which uses the high-low method, makes a product called Yin. The company incurs three different cost types (A, B, and C) and has
Yang Manufacturing, which uses the high-low method, makes a product called Yin. 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 type are presented below.
Type AType BType CTotal
5,000 units$4$9$4$17
7,500 units$4$6$3$13
The cost formula that expresses the behavior of Yang's total cost is:
A. Y = $0 + $17X.
B. Y = $20,000 + $13X.
C.Y = $40,000 + $9X.
D.Y = $45,000 + $4X.
E. Y = $60,000 + $5X.
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