Madison Company manufactures major appliances. Because of growing interest in its products, it has just had its most successful year. In preparing the budget for next year, its controller compiled the following information:
|
Month
|
Volume in Machine Hours
|
Electricity Cost
|
|
July
|
6,000
|
$ 60,000
|
|
August
|
5,000
|
53,000
|
|
September
|
4,500
|
49,500
|
|
October
|
4,000
|
46,000
|
|
November
|
3,500
|
42,500
|
|
December
|
3,000
|
36,000
|
|
Six-month total
|
26,000
|
$287,000
|
Using the high-low method, determine the variable electricity cost per machine hour and the monthly fixed electricity cost. Estimate the total variable electricity costs and fixed electricity costs if 4,800 machine hours are projected to be used next month.