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2 - Chico Ruiz, president of Morgan Tool Co., has asked for information about the cost behavior of manufacturing support costs. Specifically, she wants to
2 - Chico Ruiz, president of Morgan Tool Co., has asked for information about the cost behavior of manufacturing support costs. Specifically, she wants to know how much support cost is fixed and how much is variable. The following data are the only records available: Month Machine Hours Support Costs May 900 $ 9,200 June 1,350 12,500 July 990 8,000 August 1,250 11,000 September 1,800 14,000 Required: 1. Find monthly fixed support cost and the variable support cost per machine hour by the high-low method. 2. Explain how our analysis for Requirement 1 would change if new October data were received and machine hours were 1,700 and support costs were $15,800. 3. A least-squares regression analysis gave the following output: Regression equation: Y = $3,355 + $6.10X
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