Georgia Meadows Company Uses the High-Low Method to Analyze Production

question 12

Multiple Choice

Georgia Meadows Company uses the high-low method to analyze production costs. The following information relates to the production data for the first six months of the year. $\begin{array}{llll}\text { Month } & \operatorname{Cost}(\mathrm{Y}) &\operatorname{Hours}(\mathrm{H}) \\\text { January } & \$ 8,542 & 6,530 \\\text { February } & \$ 7,750 & 5,950 \\\text { March } & \$ 9,700 & 7,500 \\\text { April } & \$ 7,435 & 5,700 \\\text { May } & \$ 7,200 & 5,500 \\\text { June } & \$ 9,263 & 6,750\end{array}$ What is the estimated total cost at an operating level of 8,000 hours?

• A) $9,525.
• B) $9,835.
• C) $10,185.
• D) $10,325.

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Definitions:

Withdraw

The act of removing funds from an account, or taking back an offer or statement.

Investment

The allocation of resources with the expectation of generating an income or profit.

Present Value

The value today of a sum of money or sequence of cash flows expected in the future, calculated using a designated interest rate.

Contingent Liabilities

Possible obligations that might arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events.