Answer the Following Questions Using the Information Below:
Presented Below

question 26

Multiple Choice

Answer the following questions using the information below:
Presented below are the production data for the first six months of the year for the mixed costs incurred by Vertise Company.
$$\begin{array} { l r r } \text { Month } & \text { Cost } & \text { Units } \\\text { January } & \$ 4,890 & 4,100 \\\text { February } & 4,426 & 3,520 \\\text { March } & 6,730 & 5,200 \\\text { April } & 9,724 & 8,250 \\\text { May } & 5,900 & 4,900 \\\text { June } & 7,336 & 6,600\end{array}$$ Vertise Company uses the high-low method to analyze mixed costs.
-What is the estimated total cost at an operating level of 6,500 units?

• A) $7,752.44
• B) $7,764.00
• C) $7,280.00
• D) $7,661.33

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Definitions:

Direct Materials Budget

A financial plan that estimates the raw materials required for production and the expected cost of these materials over a specific period.

Direct Labor Budget

A financial plan that estimates the cost of the labor needed to meet production goals, including wages and hours.

Manufacturing Overhead Budget

A financial plan that estimates the costs of indirect materials, labor, and other expenses needed to operate a manufacturing facility.

Production Units

A measure of output from a production process, with one unit representing an item or a defined amount of service produced.