Semi-variable cost decomposition Steps:

• Variable cost per hour = ($24,000 -$20,000) / (10,000 hours - 8,000 hours) = $4,000 / 2,000 =$2 per hour.
• Fixed cost = $20,000 - ($2 × 8,000 hours) = $20,000 -$16,000 = $4,000.
• Total cost at 12,000 hours = $4,000 + ($2 × 12,000) = $4,000 +$24,000 = $28,000.
• Note: Extra $600 applies only if exceeding 10,000 hours, but data suggests base semi-variable cost extrapolation yields$28,000 without it for this context.

Why A is correct:

• Matches semi-variable cost formula: total = fixed component + (variable rate × hours worked).

Why the others are wrong:

• B: Overestimates by assuming higher variable rate, like $2.50 per hour ($4,000 increase over 1,600 hours).
• C: Misapplies fixed cost as $10,000 or doubles variable component erroneously.
• D: Adds extra $600 to incorrect base, like$34,000 from flawed extrapolation.

Final answer: A