Johnson Leathergoods manufactures backpacks. The management accountant wants to calculate the fixed and variable costs associated with the leasing of a sewing machine. Data for the past four months were collected as follows:

MONTH	LEASE COST	MACHINE HOURS
APRIL	$15,000	800
MAY	10,000	600
JUNE	12,000	770
JULY	16,000	1,000

a. Using the high-low method, calculate the variable rate for the lease cost, the fixed cost of leasing, and write down the cost equation.

b. Using the scattergraph method, draw the graph and check for linearity and outliers.