The controller of Carla Vista Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs. \begin{tabular}{lcc|} Month & \( \begin{array}{c}\text { Total } \\ \text { Maintenance Costs }\end{array} \) & \( \begin{array}{c}\text { Total } \\ \text { Machine Hours }\end{array} \) \\ January & \( \$ 2,661 \) & 3,528 \\ February & 3,024 & 4,032 \\ March & 3,629 & 6,048 \\ April & 4,536 & 7,963 \\ May & 3,226 & 5,040 \\ June & 4,931 & 8,068 \end{tabular} Determine the variable-cost components using the high-low method. (Round answer to 2 decimal places e.g. 2.25.) Variable cost per machine hour \( \$ \) eTextbook and Media Determine the fixed cost components using the high-low method. Fixed costs \[ \$ \] eTextbook and Media
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The highest activity level is in June with 8,068 machine hours and a total maintenance cost of $4,931. The lowest activity level is in January with 3,528 machine hours and a total maintenance cost of $2,661. Show more…
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High-low method. Ken Howard, financial analyst at $\mathrm{KMW}$ Corporation, is examining the behavior of quarterly maintenance costs for budgeting purposes. Howard collects the following data on machinehours worked and maintenance costs for the past 12 quarters: 1. Estimate the cost function for the quarterly data using the high-low method. 2. Plot and comment on the estimated cost function. 3. Howard anticipates that KMW will operate machines for 100,000 hours in quarter $13 .$ Calculate the predicted maintenance costs in quarter 13 using the cost function estimated in requirement 1
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