Jonathan Macintosh is a highly successful Pennsylvania orchardman who has formed his own company to produce and package applesauce. Apples can be stored for several months in cold storage, so applesauce production is relatively uniform throughout the year. The recently hired controller for the firm is about to apply the high-low method in estimating the companys energy cost behavior. The following costs were incurred during the past 12 months:

Month	Pints of Applesauce Produced			Energy Cost
January		109,000			$	70,600
February		67,000				66,100
March		70,000				66,800
April		76,000				67,950
May		94,000				69,100
June		100,000				70,250
July		124,000				70,300
August		94,000				68,800
September		94,000				69,400
October		88,000				68,500
November		127,000				72,700
December		121,000				71,400

Required: 1. Use the high-low method to estimate the companys energy cost behavior and express it in equation form. Use the formula Y = a + bX, where Y denotes energy cost for a month and X denotes pints of applesauce produced. 2. Predict the energy cost for a month in which 78,000 pints of applesauce are produced.

Use the high-low method to estimate the companys energy cost behavior and express it in equation form. Use the formula Y = a + bX, where Y denotes energy cost for a month and X denotes pints of applesauce produced. (Round coefficient of X to 2 decimal places.)

Total energy cost =

+

X

Predict the energy cost for a month in which 78,000 pints of applesauce are produced.

	Energy cost