Estimating Cost Behavior; High-Low Method

The Pearly Onion Company incurred the following monthly utility costs last year:

Month	Pounds of Onions Jarred	Cost
January	11,000	$5,500
February	9,000	4,500
March	8,000	4,300
April	10,000	5,000
May	13,000	6,500
June	14,000	7,200
July	7,000	3,500
August	6,000	3,200
September	5,000	3,400
October	4,000	2,400
November	8,000	4,200
December	10,000	4,900

REQUIRED:

1. Use the high-low method to estimate the companys utilities cost behavior and state the cost formula.

2. Predict the utilities cost for a month in which 16,000 pounds of onions were jarred.