Mitcham Ltd Has Observed That at an Activity Level of 10

Multiple Choice

Mitcham Ltd has observed that at an activity level of 10 000 units the maintenance cost is $13 000, and at 20 000 units the maintenance cost is $18 000. Using the high-low method, the cost formula for maintenance is:

A) $6000 + $.60 x units.
B) $6000 + $.1.54 x units.
C) $5000 + $.60 x units.
D) $1.54/unit.