Per-unit cost at two different activity levels for cost type

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Reference no: EM131723016

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 7,000 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

5,000 units $ 19 $ 54 $ 19 $ 92

6,500 units 19 36 18 73

If Shum produces 7,000 units, the total cost would be:

Multiple Choice

$540,000.

$700,000.

$530,000.

$875,000.

None of the answers is correct.

Reference no: EM131723016

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