Question: Pavilion Company is using the high-low method to determine the fixed and variable components of its utilities expense, a semivariable cost. Pavilion Company believes direct

Pavilion Company is using the high-low method to determine the fixed and variable components of its utilities expense, a semivariable cost. Pavilion Company believes direct labor hours is the best activity to measure the cost. In its low month, there were 1,600 direct labor hours and utilities expense was $8,000. In its high month, there were 3,600 direct labor hours and utilities expense was $12,000. Using the high-low method, what is the fixed cost per month, rounded to the nearest whole dollar?

a. $0

b. $9,231

c. $4,000

d. $4,800

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