Question
Maintenance costs at a Whetsel Corporation factory are listed below: Machine-Hours Maintenance Cost March 3,135 $48,340 April 3,095 $47,993 May 3,133 $48,345 June 3,157 $48,548
Maintenance costs at a Whetsel Corporation factory are listed below:
| Machine-Hours | Maintenance Cost |
March | 3,135 | $48,340 |
April | 3,095 | $47,993 |
May | 3,133 | $48,345 |
June | 3,157 | $48,548 |
July | 3,065 | $47,733 |
August | 3,076 | $47,830 |
September | 3,084 | $47,880 |
October | 3,125 | $48,247 |
November | 3,098 | $48,014 |
Management believes that maintenance cost is a mixed cost that depends on machine-hours. Use the high-low method to estimate the variable and fixed components of this cost.
a) Compute the variable component first and round off to the nearest whole cent.
b) Compute the fixed component second and round off to the nearest whole dollar.
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