Sweetland Company, Which Uses the High-Low Method to Analyze Cost

Multiple Choice

Sweetland Company, which uses the high-low method to analyze cost behaviour, has determined that machine hours best explain the company's utilities cost. The company's relevant range of activity varies from a low of 700 machine hours to a high of 1,200 machine hours, with the following data being available for the first six months of the year: $\begin{array} { | l | r | r | } \hline{ \text { Month } } & \text { Utilities } & \text { Machine Hours } \\\hline \text { January } & \$ 8,900 & 800 \\\text { February } & \$ 8,560 & 720 \\\text { March } & \$ 9,150 & \$ 10 \\\text { April } & \$ 9,560 & 920 \\\text { May } & \$ 9,825 & 950 \\\text { June } & \$ 9,350 & 900 \\\hline\end{array}$ Using the high-low method, the utilities cost associated with 980 machine hours would be:

A) $9,900.
B) $12,422.
C) $12,812.
D) $13,952.
E) $15,044.