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

question 32

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. $\begin{array}{lcccc} & \text { Type A } & \text { Type B } & \text { Type C } & \text { Total } \\5,000 \text { units } & \$ 4 & \$ 9 & \$ 4 & \$ 17 \\7,500 \text { units } & \$ 4 & \$ 6 & \$ 3 & \$ 13\end{array}$ If Yang produces 10,000 units, the total cost would be:

• A) $90,000.
• B) $100,000.
• C) $110,000.
• D) $125,000.
• E) None of the other answers is correct.

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