Yamahonda Motors Company makes motorcycles. Management wants to estimate overhead costs to plan its operations. A recent trade publication revealed that overhead costs tend to vary with machine-hours and/or materials costs. To check this, they collected the following data for the past 12 months:

a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours.

b. If the plant is planning to operate at a level of 190 machine-hours next period, what would be the estimated overhead costs? (Assume no inflation.)

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Month No. Machine- Materials Overhead Hours Cost Costs 1 ... .. 175 $4,750 $4,500 2........ 170 4,600 4,225 3 160 4,200 3,780 4 .. 190 5,900 5,250 5 ... ........ 175 4,600 4,800 6... ..200 5,250 5,100 7 ... ..... 160 4,350 4,450 8... ..... 150 4,350 4,200 9 ... ..210 6,000 5,475 10 ... 180 4,950 4,760 11 12 ..170 4,450 4,325 145 3,800 3,975