Shum Manufacturing, which uses the high-low method, makes a product called Kwan. 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.  Type A Type B Type C Total 5,000units $4  $9  $4  $17  7,500units  4   6   3   13 If Shum produces 10,000 units, the total cost would be:

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


Answer: A

Business

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