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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