eBook Show Me How High-Low Method, Cost Formulas The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different levels, are presented as follows: Resource Number of Moves Total Cost Forklift depreciation: Low 6,500 $ 1,800 High 20,000 1,800 Indirect labor. Low 6,500 $ 74,250 High 20,000 135,000 Fuel and oil for forklift: > Low 6,500 $ 4,940 High 20,000 15,200 Required: If required, round your answers to two decimal places. Enter a "0" if required. 1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components. Forklift depreciation: 0 V Previous Next Show Me How Forklift depreciation: V $ 0 F $ 1,800 Y $ 0.76 x Indirect labor: V F $ Y + $ Fuel and oil for forklift: V > F Y Y $ 2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 9,000 moves. Forklift depreciation Indirect labor Previous Next Fuel and oil for forklift 2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 9,000 moves. Forklift depreciation Indirect labor Fuel and oil for forklift 3. Construct a cost formula that can be used to predict the total cost of the three resources combined. If required, round your answers to two decimal places. Materials handling cost = $ + $ Using this formula, predict the total materials handling cost if activity output is 9,000 moves. Y = $ Feedback Check My Work 1. V= (Y2 - Yu)/(X2 - X1), F= Y2 - VX2