Pearson Electric Company Uses the High-Low Method to Analyze Mixed

question 5

Multiple Choice

Pearson Electric Company uses the high-low method to analyze mixed costs. The following information relates to the production data for the first six months of the year. $\begin{array}{llll}\text { Month } & \operatorname{Cost}(\mathrm{Y}) &\operatorname{Hours}(\mathrm{H}) \\\text { January } & \$ 7,300 & 260 \\\text { February } & \$ 9,125 & 730 \\\text { March } & \$ 7,540 & 410 \\\text { April } & \$ 7,485 & 330 \\\text { May } & \$ 9,460 & 980 \\\text { June } & \$ 9,030 & 705\end{array}$ What is the estimated total cost at an operating level of 1,180 hours, using the high-low method?

• A) $10,060.
• B) $10,145.
• C) $10,015.
• D) $10,805.

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Definitions:

Declarative Memory

A type of long-term memory that involves the capacity to recall factual information, events, and concepts explicitly.

Overconfidence

A cognitive bias where an individual's subjective confidence in their judgments is reliably greater than their objective accuracy.

Source-Monitoring Errors

Mistakes made when individuals fail to distinguish the origin of their memories, attributing them incorrectly to specific sources.

Reality-Monitoring Errors

Failures in the ability to distinguish between memories of actual events and internal imaginings or thoughts, leading to confusion about what has truly occurred.