The Following Data Has Been Assembled for Zowie Company The Total Cost at an Operating Level of 2,850 Hours

question 31

Multiple Choice

The following data has been assembled for Zowie Company. Use the high- low method. $$\begin{array} { l l } \text { Cost } & \text { Hours } \\\$ 24,400 & 2,000 \\34,000 & 2,600 \\31,280 & 2,450 \\36,400 & 3,000 \\44,160 & 3,900\end{array}$$ The total cost at an operating level of 2,850 hours is:

• A) $25,692
• B) $34,736
• C) $32,016
• D) $33,240

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Definitions:

Variable Costs

Costs that change in proportion to the good or service that a business produces.

Shut Down

The cessation of operations, often temporarily, by a business or organization.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.

Marginal Costs

The added cost of producing one additional unit of a product or service.