Coughlin Company, which uses thehigh-low method to analyze costbehaviour, has determined that machine hours best predict thecompany's total utilities cost. Thecompany's cost and machine hour usage data for the first six months of the year follow.

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Requirements

Using thehigh-low method, answer the followingquestions:

1.What is the variable utilities cost per machinehour?

2.What is the fixed cost of utilities eachmonth?

3.If Coughlin Company uses 1,250 machine hours in amonth, what will its total costsbe?

Requirement 1. What is the variable utilities cost per machinehour?

Let's begin by determining the formula that is used to calculate the variable cost(slope).

/

=

Variable cost (slope)

Using thehigh-low method, the variable utilities cost per machine hour is $

nothing

. (Round the variable cost to the nearestcent.)

Requirement 2. What is the fixed cost of utilities eachmonth?

Let's begin by determining the formula that is used to calculate the fixed cost component.

-

=

Fixed cost

Using thehigh-low method, the fixed cost of utilities each month is $

nothing

. (Round the total variable costs to the nearest wholedollar.)

Requirement 3. If Coughlin Company uses 1,250 machine hours in amonth, what will its total costsbe?

The total costs when 1,250 machine hours are incurred is $

nothing

. (Round your interim and final calculations to the nearest wholedollar.)

Choose from any drop-down list and then continue to the next question.

Month Total Cost Machine Hours

January $2,850 940

February $3,710 1,180

March $3,520 1,065

April $3,710 1,290

May $4,100 1,340

June $4,600 1,640