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

Multiple Choice

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. If Shum 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 answers is correct.