Yang Manufacturing, Which Uses the High-Low Method, Makes a Product

question 27

Multiple Choice

Yang Manufacturing, which uses the high-low method, makes a product called Yin. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,500 units and 10,000 units per month. Per-unit costs at two different activity levels for each cost type are presented below. $\begin{array}{|l|l|l|l|l|l|l|l|}\hline&\text { Type A}&&\text { Type B}&&\text { Type C}&&\text { Total } \\\hline 5,000 \text { units } & \$ 4 & & \$ 9 && \$ 4 & & \$ 17 \\\hline 7.500 \text { units } & \$ 4 && \$ 6 & &\$ 3 & & \$ 13 \\\hline\end{array}$ The cost types shown above are identified by behaviour as: $\begin{array}{l}\begin{array}{|l|l}\hline&\text { Type A }\\\hline 1 & \text { Fixed } \\\hline 2 & \text { Fixcd } \\\hline 3 & \text { Variable } \\\hline 4 & \text { Variable } \\\hline 5 & \text { Semivariable } \\\hline\end{array}\begin{array}{|l|l}\hline&{\text { Type B }} \\\hline &\text { Variable } \\\hline & \text { Semivariable } \\\hline &\text { Scmivariable } \\\hline &\text { Fixed } \\\hline & \text { Variable } \\\hline\end{array}\begin{array}{|l|l|}\hline&{\text { Type C }} \\\hline &\text { Semivariable } \\\hline &\text { Variable } \\\hline & \text { Fixed } \\\hline &\text { Semivariable } \\\hline &\text { Fixed }\\\hline\end{array}\end{array}$

• A)1
• B)2
• C)3
• D)4
• E)5

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Definitions:

Operations Period

The timeframe during which specific operational activities or processes are carried out.

Financial Risk

The possibility of losing money on an investment or business operation, including risks related to market movements, credit, liquidity, and operational failures.

Actual Return

The real gain or loss experienced on an investment over a specified time period.

Expected Return

Expected return is the anticipated amount of profit or loss an investment is predicted to generate, accounting for the probability of different outcomes.