Andover Company makes weather balloons. The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory. Data for the past six months were collected.

MonthMaintenance costMachine hoursJanuary$10,120526February9,560389March9,712412April10,460569May10,226541June9,686399

Required:

A.Using the high-low method, calculate the fixed cost of maintenance and the variable rate per machine hour.

Fixed cost$

Variable rate$ per machine hour

B.Using the high-low method, construct the cost formula for the total maintenance cost.

Total maintenance cost=Fixed cost+Variable cost=$+($per hour X no. of machine hours)

C.Calculate the budgeted cost for maintenance assuming that 485 hours are worked next month.

$