The controller of Menno Corp presents you with the following observations in a general ledger account called Maintenance:

-Using the high-low method, what will the total monthly manufacturing costs be if Menno Corp produces 7,500 units?
A) $2,625
B) $5,555
C) $4,525
D) $4,050

Question

The controller of Menno Corp presents you with the following observations in a general ledger account called Maintenance:
 
-Using the high-low method, what will the total monthly manufacturing costs be if Menno Corp produces 7,500 units?
A) $2,625 
B) $5,555 
C) $4,525 
D) $4,050

Quizplus · Accepted Answer

Since we are given data in the Maintenance account, it is safe to assume that maintenance costs are a part of total manufacturing costs. To use the high-low method, we need to identify the highest and lowest levels of activity and the corresponding costs. In this case, the observations in the Maintenance account are not useful for identifying the highest and lowest levels of activity, so we cannot use the high-low method. Therefore, we cannot determine the total manufacturing costs for producing 7,500 units based on the information given.

The Controller of Menno Corp Presents You with the Following