Reynolds Company, which uses the high- low method to analyze cost behavior, has determined that machine hours best predict the company€™s total utilities cost. The company€™s cost and machine hour usage data for the first six months of the year follow:

Requirements
Using the high- low method, answer the following questions:
1. What is the variable utilities cost per machine hour?
2. What is the fixed cost of utilities each month?
3. If Reynolds Company uses 1,220 machine hours in a month, what will its total costsbe?

Transcribed Image Text:

Month January3,410 February Total Cost $3,790 $3,574 $3,730 $4,500 $4,294 Machine Houns 1,060 1,180 1,030 1,260 1,310 1,430 April May ..u.. June cc