Fixed and variable components of repair expense

Question

Problem:

Campus Copy & Printing wants to predict copy machine repair expense at different levels of copying activity (number of copies made).

The following data have been gathered:

Copy Machine

Month Repair Expense Copies Made

May            $ 8,500    300,000
June            12,500    500,000
July             20,500    900,000
August         16,500    700,000
September   10,500    400,000

Required to do:

Determine the fixed and variable components of repair expense using the high-low method. Use copies made as the measure of activity.