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:

Horizontal Specialization

An organizational structure approach that focuses on dividing work and roles based on specialized functional activities or operations across the same hierarchical level.

Division of Labor

The allocation of different tasks or jobs to different people or groups, often to improve efficiency and productivity.

Economic Power

The ability of an entity, such as a country, company, or individual, to influence or control economic activities, markets, or resources, often translating into political or social power.

Learning Organization

An organization that actively encourages, facilitates, and values the continuous learning and development of its members, promoting adaptability and innovation.