• Dynamic Fabrics produces textile materials and needs to analyze production costs related to machine hours.
• Data:
  • February: Total Costs: $900,000, Machine Hours: 20,000
  • November: Total Costs: $1,350,000, Machine Hours: 30,000
• Requirements:
  • Calculate the variable cost per machine hour and the fixed costs using the High-Low Method.
  • Formulate the cost equation.
  • What would be the total costs if machine hours increased to 35,000?
  • Provide a brief analysis on the impact of scaling up production by 20% in terms of cost.