12. Choice (You must choose 6 questions from among #'s 5-13 to answer): Machine hours and electricity costs for Wells Industries for 2011 were as follows: Month January February March April May June July August September October November December Required: A Machine Electricity Hours Costs 2,000 $ 9,200 2,320 10,500 1,520 6,750 2,480 11,500 3,040 14,125 2,640 11,000 3,280 12,375 2,800 11,375 1,600 7,750 2,960 13,000 3,760 15,500 3,360 13,875 Using the high-low method, develop an estimate of variable electricity costs per machine hour. HOURS- High-3760 COST- 15500 Low-1520 6750 =2240 =8750 B. C. D. 8750/2240=3.91 Using the high-low method, develop an estimate of fixed electricity costs per month. 15500-(3760*3.91)=798.4 Using the high-low method, develop a cost function (linear cost equation) for use in estimating monthly electricity costs. Y=a+bx Total cost y 798.40+3.91x Using the cost equation you developed in "C" above, estimate the total electricity costs for a month in which 3,000 machine hours are worked. 798.40+3.91*3000=12528.40