Assume that your company has had the following recent overhead history:

	Machine Hours	Manufacturing Overhead
October	3,000	$202,000	October
November	5,000	$304,000	November
December	7,000	$400,000	December
January	2,500	$175,000	January

(a) Using the high-low method, find both (1) the fixed component of monthly overhead, and (2) the variable component of manufacturing overhead cost per machine hour.

(b) Using your fixed and variable components from (a), estimate the manufacturing overhead costs for the two months described in the table which you did not use for your high-low estimates. How much are these high-low estimates off, and are these estimates higher than the actual values or lower?