Liva Company Wants to Develop a Cost Function for Its

Multiple Choice

Liva Company wants to develop a cost function for its maintenance costs to estimate such costs for the coming year. The following data are available: Direct Maintenance
Month Labour Hours Costs Incurred
January 4,000 $ 900
February 6,500 1,325
March 7,000 1,500
April 5,500 1,150
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