E4-2 High-low methodAmes Automotive Company has accumulated the following dataover a six-month period:Indirect LaborHoursIndirectLabor CostsJanuary........................... 400 $ 6,000

February . . . ....................... 500 7,000

March. . ........................... 600 8,000

April . . . ........................... 700 9,000

May . . . . . . . . . . . . . . . . . . . . . . . . . 800 10,000

June . . . ........................... 900 11,000

3,900 $51,000Separate the indirect labor into its fixed and variable components, using the high-low method.

E4-3 Scattergraph methodUsing the data in E4-2 and a piece of graph paper:1. Plot the data points on the graph and draw a line by visualinspection, indicating the trend shown by the data points.2. Determine the variable cost per unit and the total fixed costfrom the information on the graph.