Pepare a graph showing the behavior of maintenance costs

Question

The controller of Dugan industries has collected the followingmonthly expense data for use in analyzing the cost behaviour ofmaintenance costs.

                                                            Total                                                      Total

Month                                           Maintenancecosts                                     Machine hours

January                                                $2,400                                                   300

February                                               3000                                                     400

March                                                   3,600                                                    600

April                                                     4,500                                                     790

May                                                      3,200                                                      500

June                                                      4,900                                                     800

Instructions:

1. Determine the fixed and variable cost components using the highlow method
2. Prepare a graph showing the behavior of maintenance costs, andidentify the fixed and variable cost elements. Use 200 unitincrements and $1000 cost increments