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

question 34

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. $\begin{array}{|l|l|l|l|l|l|l|l|}\hline&\text { Type A}&&\text { Type B}&&\text { Type C}&&\text { Total } \\\hline 5,000 \text { units } & \$ 4 & & \$ 9 && \$ 4 & & \$ 17 \\\hline 7.500 \text { units } & \$ 4 && \$ 6 & &\$ 3 & & \$ 13 \\\hline\end{array}$ If Yang produces 10,000 units, the total cost would be:

• A)$90,000.
• B)$105,000.
• C)$100,000.
• D)$110,000.
• E)$125,000.

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, entitling the holder to a share of the company's profits through dividends and/or capital appreciation.

Par Value

A nominal value assigned to share certificates of a company, which has no impact on market value but may affect legal capital.

Consolidated Land

An accounting term referring to land owned by a parent company and its subsidiaries, which is accounted for in the consolidated financial statements.

Date of Acquisition

Date of Acquisition is the specific date on which an asset was acquired or a company was purchased, crucial for financial reporting and valuation purposes.