Account Analysis to Determine Cost Behavior 3. Q. Higgins, owner of Robin's Nest, wants to determine the cost behavior of labor and overhead. Higgins pays his workers a salary; during busy times, everyone works te get the orders out. Temps (temporary workers hired through an agency) may be hired to pack and prepare completed orders for shipment. During slower times, Higgins catches up on bookkeeping and administrative tasks while the salaried workers do preventive maintenance, clean the lines and building, etc. Temps are not hired during slow times. Higgins found that workers' salaries, temp agency payments, rentals, utilities, and plant and equipment depreciation are the largest dollar accounts. He believes that workers' salaries and plant and equipment depreciation are fixed, temp agency payments are associated with the number of orders (since temp workers are used to pack and prepare completed orders for shipment), and electricity is associated with the number of machine hours. When the number of different parts stored by Robin's Nest exceeds the space in the materials storeroom, Higgins rents nearby warehouse space. He can rent as much or as little space as he wants on a month-to- month basis. Therefore, he believes warehouse rental payments are variable with the number of parts purchased and stored. The account balances for the past six months as well as the six-month total are as follows: Plant & Workers' Salaries Temp Agency Payments Warehouse Rental Equipment Electricity Depreciation January $9,800 50 $350 $880 $3,100 February 9,800 900 4601 910 3,100 March 9,800 1,650 395 850 3,100 April 9,800 2,050 3901 890 3,100 May 1 9,800 2,150 440 750 3,100 June 9,800 2,100 365 820 3,100 Total $58,800 $8,850 $2,400 $5,100 $18,600 Information on number of machine hours, orders, and parts for the six-month period follows: