Hot'lanta, Inc Using the High-Low Method, the Utilities Cost Associated with 980

question 8

Multiple Choice

Hot'lanta, Inc., which uses the high-low method to analyze cost behavior, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,100 machine hours, with the following data being available for the first six months of the year: $\begin{array}{lrr}\text { Month }&\text { Utilities }&\text { Machine Hours }\\\text { January } & \$ 8,700 & 800 \\\text { February } & 8,360 & 720 \\\text { March } & 8,950 & 810 \\\text { April } & 9,360 & 920 \\\text { May } & 9,625 & 950 \\\text { June } & 9,150 & 900\end{array}$ Using the high-low method, the utilities cost associated with 980 machine hours would be:

• A) $9,510.
• B) $9,660.
• C) $9,700.
• D) $9,790.
• E) None of the other answers is correct.

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Definitions:

Company Stock

Equity securities issued by a corporation, representing ownership interests in the company.

Prefiling Period

In securities registration, the period that begins when an issuer starts to think about issuing securities and ends when the issuer files the registration statement and prospectus with the SEC.

Issuer

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Registration Statement

A set of documents filed with the Securities and Exchange Commission that contains information about a company's financial status, operations, and plans for an initial public offering (IPO).