Question: Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three different cost types (A, B, and C) and has

Shum Manufacturing, which uses the high-low method, makes a product called Kwan. The company incurs three different cost types (A, B, and C) and has a relevant range of operation between 2,400 units and 15,000 units per month. Per-unit costs at two different activity levels for each cost type are presented below.

Type A Type B Type C Total
4,800 units $ 5 $ 8 $ 7 $ 20
7,200 units 6 8 5 19

The cost formula that expresses the behavior of Shums total cost is:

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