Reference no: EM132502112

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.

Type A Type B Type C Total

5,000 units $4 $9 $4 $17

7,500 units $4 $6 $3 $13

Question 1: The cost formula that expresses the behavior of Yang's total cost is:

A. Y = $0 + $17X.

B. Y = $20,000 + $13X.

C.Y = $40,000 + $9X.

D.Y = $45,000 + $4X.

E. Y = $60,000 + $5X.