Lee Corporation Manufactures and Sells Party Items Let $\quad$ A = Fixed Production Costs Per Month

Multiple Choice

Lee Corporation manufactures and sells party items. The following representative direct labour hours and production costs are provided for a four-month period:
$\begin{array}{ccc} \text { Month } & \text { Direct Labour Hours } & \text { Production } \\\hline \text { January } & 3,600 & \$ 15,000 \\ \text { February } & 4,800 & 17,500 \\ \text { March } & 6,000 & 20,000 \\ \text { April } & 4,800 & 17,500 \\\text { Total } & 19.200 & \$ 70.000 \\\end{array}$ Let $\quad$ a = Fixed production costs per month
$\quad$ $\quad$ b = Variable production costs per direct labour hour
$\quad$ $\quad$ n = Number of months
$\quad$ $\quad$ X = Direct labour hours per month
$\quad$ $\quad$ Y = Total monthly production costs
$\quad$ $\quad$ s = Summation
-Refer to the figure.Using the high-low method,what is the cost formula for estimating costs?

A) Total cost = $2.08X
B) Total cost = $5,000 + 2.08X
C) Total cost = $7,500 + $2.08X
D) Total cost = $20,000 + $2.08X