MEG Ltd leases a photocopy machine with terms that include a fixed fee each month plus a charge for each photocopy made. MEG made 5,000 copies and paid a total of $600 in January. In April, they paid $400 for 3,000 copies.

Required:

a) What is the variable cost per copy if MEG uses the high-low method to analyze costs?

b) How much would MEG Ltd pay if it made 7,500 copies? (Hint: Need to solve for Fixed cost)

(working note as well)