In a Month When a Hotel's Laundry Department Processes 10,000

In a month when a hotel's laundry department processes 10,000 kgs of laundry, the laundry operating costs are $15,000. In a month when it processes 20,000 kgs of laundry, the laundry operating costs are $20,000. Use the high-low method to determine the laundry department's fixed cost per month.

A) Monthly fixed cost is $5,000.
B) Monthly fixed cost is $8,000.
C) Monthly fixed cost is $10,000.
D) Monthly fixed cost is $12,000.
E) None of the above

Correct Answer:

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