The controller of Teton Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.
|
Month
|
Total
Maintenance Costs
|
Total
Machine Hours
|
|
January
|
$2,900
|
300
|
|
February
|
3,000
|
400
|
|
March
|
3,600
|
600
|
|
April
|
4,300
|
790
|
|
May
|
3,200
|
500
|
|
June
|
4,500
|
800
|
Instructions
- Determine the fixed and variable cost components using the high-low method.
- What would the expected maintenance costs be for July assuming the company expects to operate at a level of 920 machine hours?