Ajax Uses the High-Low Method of Estimating Costs

question 31

Multiple Choice

Ajax uses the high-low method of estimating costs.Ajax had total costs of $50,000 at its lowest level of activity,when 5,000 units were sold.When,at its highest level of activity,sales equaled 12,000 units,total costs were $78,000.Ajax would estimate fixed costs as:

• A)$28,000
• B)$30,000
• C)$64,000
• D)$128,000

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Definitions:

Equity

The amount of ownership interest in an asset or business, after deducting all debts associated with that asset.