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) 11,250 $ 350,000
Slowest month (December) 6,250 $ 270,000

If Shapely expects to use 8,500 machine hours next month, what are the estimated direct labor costs?

$306,000.

$208,857.

$471,155.

$216,000.

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