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

Multiple Choice

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. $\begin{array}{|l|l|l|l|l|l|l|l|}\hline&\text { Type A}&&\text { Type B}&&\text { Type C}&&\text { Total } \\\hline 5,000 \text { units } & \$ 4 & & \$ 9 && \$ 4 & & \$ 17 \\\hline 7.500 \text { units } & \$ 4 && \$ 6 & &\$ 3 & & \$ 13 \\\hline\end{array}$ The cost formula that expresses the behaviour 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.