High-Low Method Estimation

Donner Company would like to estimate the variable and fixed components of its maintenance costs and has compiled the following data for six months of operations.

	Hours	Maintenance Cost
January	170	$6,365
February	210	7,660
March	140	5,630
April	120	5,320
May	180	6,610
June	190	6,855

Requirement 1:

Using the high-low method of analysis, estimate variable cost per labor hour for maintenance. Round to 2 decimal places.

$

Requirement 2:

High-low method of analysis continued. Using the value calculated in Requirement 1, calculate the total fixed cost per month for maintenance. Round to 2 decimal places.

$