Bava Company Wants to Develop a Cost Function for Its

Multiple Choice

Bava Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available: $\begin{array}{llr}& \text { Direct } & \text { Maintenance } \\\text { Month } & \text { Labour Hours } & \text { Costs Incurred }\\\text { June } & 4,000 & \$ 900 \\\text { July } & 6,500 & 1,325 \\\text { August } & 7,000 & 1,500 \\\text { September } & 5,500 & 1,150\end{array}$ Using the high-low method, what is the cost function for maintenance costs?

A) $500 + $1.00 per direct labour hour
B) $300 + $1.50 per direct labour hour
C) $100 + $0.20 per direct labour hour
D) $200 + $0.10 per direct labour hour