Fan Corp Uses the High-Low Method to Estimate How Its Costs

question 161

Multiple Choice

Fan Corp. uses the high-low method to estimate how its costs vary with levels of production. For the year, its high production was 5,000 units in a day, at a cost of $180,000, and its low production was 4,000 units, at a cost of $160,000. Its fixed costs equal

• A) Zero
• B) 50000
• C) 80000
• D) 100000

---

Definitions:

Sales Message

A message intended to influence or educate prospective customers regarding a service or product.

Quick Action

Prompt response or decision-making in a timely manner.

Singles Night

Social events typically organized by bars, clubs, or other venues to cater to individuals who are single, facilitating opportunities for meeting potential romantic partners.

Variable

An element, feature, or factor that is likely to vary or change; it is a concept used in mathematical functions and statistical analysis.