E 3. Whitehouse Company manufactures major appliances. Because of growing interest in its products, it has just had its most successful year. In preparing the budget for next year, its controller compiled these data:

Volume in Month Machine Hours Electricity Cost July 6,000 $ 60,000 August 5,000 53,000 September 4,500 49,500 October 4,000 46,000 November 3,500 42,500 December 3,000 39,000 Six-month total 26,000 $290,000 Using the high-low method, determine the variable electricity cost per machine hour and the monthly fixed electricity cost. Estimate the total variable electricity costs and fixed electricity costs if 4,800 machine hours are projected to be used next month.

Mixed Costs: High-Low Method