The Shapely Company uses the high-low method to determine its cost equation.The following information was gathered for the past year: If Shapely expects to use 10,000 machine hours next month,what are the estimated direct labor costs?
A)$160,000
B)$180,000
C)$175,000
D)$150,000

Question

Quizplus · Accepted Answer

The high-low method calculates variable cost per unit and fixed costs using the highest and lowest activity levels. Given the options, $160,000 is the estimated direct labor cost for 10,000 machine hours.

The Shapely Company Uses the High-Low Method to Determine Its