Question: The Shapely Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Machine Hours Direct Labor

The Shapely Company uses the high-low method to determine its cost equation. The following information was gathered for the past year:

Machine Hours Direct Labor costs
Busiest month(June) 14,750 $ 770,000
Slowest month (December) 9,750 $ 620,000

If Shapely expects to use 12,000 machine hours next month, what are the estimated direct labor costs?

$687,500.

$1,008,260.

$510,000.

$400,969.

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