Question
2. Inside the Box, Corp. uses the high-low method to analyze cost behavior. The company observed that at 18,000 machine hours of activity, total maintenance
2. Inside the Box, Corp. uses the high-low method to analyze cost behavior. The company observed that at 18,000 machine hours of activity, total maintenance costs averaged $7 per hour. When activity was 13,000 machine hours, which was still within the relevant range, the average cost per machine hour totaled $8.50. Show your work to all questions below.
a. Calculate the estimated variable maintenance cost per unit (round your answer to two decimals):
b. Calculate the estimated total fixed maintenance costs (round your answer to the nearest whole dollar):
c. State the maintenance cost linear formula in the y = a + b(x) format:
d. Calculate the total estimated maintenance cost of 17,000 machine hours (round your answer to the nearest dollar):
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