Yang Manufacturing Makes A Product Called Yin The Relevant Range Of Operations I

Yang Manufacturing makes a product called Yin. The relevant range of operations is between 2500 units and 10 000 units of Yin per month. Per unit costs at two activity levels are as follows: 5000 units at $17.00 per unit; 7500 units at $13.00 per unit. Determine the cost formula that expresses the behaviour of Yang’s total costs: A.

Y $60 000 + $5X


Y $20 000 + $13X


Y $45 000 + $4X


Y $40 000 + $9X

The correct answer is A. Please explain

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