The Macon Company Uses the High-Low Method to Determine Its

The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year:
$$\begin{array} { l c c } & \text { Machine } & \text { Direct Labor } \\ & \text { Hours } & \text { Costs } \\ \text { Busiest month (June) }& 14,000 & \$ 2 0 0 , 0 0 0 \\\text { Slowest month (December) }& 6,000 & \$ 120,000\end{array}$$
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What are the direct labor costs per machine hour?

A) $20.00.
B) $16.00.
C) $14.29.
D) $10.00.

Correct Answer:

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