The controller of Furgee 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 $2,500 300 February 3,000 350 March 3,600 500 April 4,500 690 May 3,200 400 June 4,900 700 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 100-hour increments and $1,000 cost increments.

AppendixLO1