Lewis company needs to determine the variable utilities rate per machine hour in order to estimate cost for Aug.

Month                          Machine hours worked                          Utilities cost 

April                                       4,500                                          $9,560

May                                        4,200                                           $9,440

June                                       6,500                                          $10,725

July                                         7,000                                          $11,400

Lewis anticipates producing 5,000 units in Aug. each unit requiring 1.5 hours of machine time. The company uses the high-low method to analyze costs.

A Calculate the variable and fixed components of the utilities cost

B Using the data calculated above, estimate the utilities cost for Aug.

C Compare the high-low method versus the visual-fit mehod with respec to (1) number of data observations used in the analysis and (2) objectivity of the  results.