Martin owns a machine shop. In reviewing his utility bill for the last 12 months, he found that his highest bill of $2,800 occurred in August when his machines worked 1,400 machine hours. His lowest utility bill of $2,600 occurred in December when his machines worked 900 machine hours.
Requirements
1. Calculate (a) the variable rate per machine hour and (b) Martin’s total fixed utility cost.
2. Show the equation for determining the total utility cost for Martin’s.
3. If Martin’s anticipates using 1,200 machine hours in January, predict his total utility bill using the equation from Requirement 2.
4. Draw a graph illustrating your total cost under this plan. Label the axes, and show your costs at 900, 1,200, and 1,400 machine hours.