The controller of Dousmann Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Total Total Month Maintenance Costs Machine Hours January $2,750 3,500 February 3,000 4,000 March 3,600 6,000 April 4,500 7,900 May 3,200 5,000 June 5,000 8,000 Instructions

(a) Determine the fixed- and variable-cost components using the high-low method.

(b) Prepare a graph showing the behavior of maintenance costs, and identify the fixed- and variable-cost elements. Use 2,000-hour increments and $1,000 cost increments.

AppendixLO1