High$-$Low Method. Gaines Company produces smartphones. Management wants to estimate the cost of production equipment used to produce smartphones. The company reported the following monthly cost data related to production equipment: High$-$Low Method. Gaines Company produces smartphones. Management wants to estimate the cost of production equipment used to produce smartphones. The company reported the following monthly cost data related to production equipment:

$\backslash$table$[[$Reporting Period $($Month$),$Total Costs,Machine Hours$],[$January$,$$$920,000,45,000],[$February$,600,000,25,000],[$March$,500,000,20,000],[$April$,1,100,000,90,000],[$May$,1,140,000,95,000],[$June$,620,000,30,000],[$July$,880,000,38,000],[$August$,910,000,48,000],[$September$,1,060,000,78,000],[$October$,960,000,51,000],[$November$,1,400,000,96,000],[$December$,980,000,54,000],[$Req$,,]]$

Required:

a$.$ Use the four steps of the high$-$low method to estimate the total fixed cost per month and the variable cost per machine hour. State your results in the cost equation form $Y=f+vx$ by filling in the dollar amounts for $f$ and $v.$

b$.$ What would the company's estimated costs be if it used $70,000$ machine hours next month?

c$.$ What would the company's estimated costs be if it used $12,000$ machine hours next month? Why might you feel uncomfortable estimating costs for $12,000$ machine hours?

Reporting Period $($Month$)$ Total Costs Machine Hours

January $$920,00045,000$

February $600,00025,000$

March $500,00020,000$

April $1,100,00090,000$

May $1,140,00095,000$

June $620,00030,000$

July $880,00038,000$

August $910,00048,000$

September $1,060,00078,000$

October $960,00051,000$

November $1,400,00096,000$

December $980,00054,000$

Required:

Use the four steps of the high$-$low method to estimate the total fixed cost per month and the variable cost per machine hour. State your results in the cost equation form Y $=$ f $+$ vX by filling in the dollar amounts for f and v$.$

What would the company$$s estimated costs be if it used $70,000$ machine hours next month?

What would the company$$s estimated costs be if it used $12,000$ machine hours next month? Why might you feel uncomfortable estimating costs for $12,000$ machine hours?