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The Macon Company uses the high-low method to determine its cost equation. The following information was...

The Macon 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) 14,000 $ 200,000
Slowest month (December) 6,000 $ 120,000


If Macon expects to use 10,000 machine hours next month, what are the estimated direct labor costs?

  • $160,000.

  • $175,000.

  • $180,000.

  • $150,000.

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