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Chen Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's

Chen Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's cost and machine hour usage data for the first six months of the year follow:

Month

Total Cost

Machine Hours

January. . . . . .

$3,460

1,080

February. . . . .

$3,720

1,180

March. . . . . .

$3,385

1,070

April. . . . . . . .

$3,710

1,290

May. . . . . . . .

$4,500

1,350

June. . . . . . .

$3,985

1,470

Using the high-low method, answer the following questions:

a)

What is the variable utilities cost per machine hour?

b)

What is the fixed cost of utilities each month?

c).

If Chen Company uses 1,200 machine hours in a month, what will its total costs be?

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