Academy Products manufactures a variety of custom components for use in aircraft navigation and communications systems. The controller has asked for your help in estimating fixed and variable overhead costs for Academys Rio Puerco plant. The controller tells you that the best cost driver for estimating overhead is machine-hours.

Monthly data on machine-hours and overhead costs for the last year have been collected and are shown as follows.

Required:

a. Estimate the monthly fixed costs and the unit variable cost per machine-hour using the high-low estimation method. (Round variable cost per unit to 1 decimal place.)

b. Coordinates of scattergraph points relating overhead costs to the number of machine-hours.

Month 1 2 3 4 5 6 7 8 9 10 11 12 Machine-Hours Overhead Costs 680,000 $ 672,000 950,000 2,220,000 790,000 1,270,000 715,000 830,000 1,060,000 3,750,000 850,000 1,450,000 775,000 1,150,000 840,000 1,550,000 985,000 2,550,000 705,000 890,000 740,000 1,030,000 750,000 960,000 Overhead costs per MH X Machine hour High-Low Method, Scattergraph Academy Products Month 1 $4,100,000 Month 2 $3,600,000 53,100,000 Month 3 2600,000 Month 4 Overhead 100,000 Month 5 $1,600,000 $1,100,000 Month 6 $600,000 650,000 750,000 850,000 950,000 1,050,000 600,000 700,000 800,000 900,000 1,000,000 1,100,000 Month 7 Machine Hours reset