Shipping expense is $9,000 for 8,000 pounds shipped and $11,250 for 11,000 pounds shipped. Assuming that this activity is within the relevant range, if the company ships
9,000 pounds, its expected shipping expense is closest to?
A)$8,583.
B)$10,125.
C)$9,750.
D)$9,972.

Question

Quizplus · Accepted Answer

Using the high-low method:

Variable cost per pound = (11,250 - 9,000) / (11,000 - 8,000) = $1.50 per pound

Expected shipping expense for 9,000 pounds: 
($1.50 x 9,000) + $9,000 = $13,500

Therefore, the closest answer is $9,750 (choice C).

Shipping Expense Is $9,000 for 8,000 Pounds Shipped and $11,250