Nantucket Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The companys controller, Alan Denney, has recently completed a cost study of the firms material-handling department. The activity measure (independent variable) used in the study was hundreds of pounds of equipment loaded or unloaded at the companys loading dock. Denney compiled the following data.

	Units of Activity
Month	(hundreds of pounds of equipment loaded or unloaded)			Material-Handling Department Costs
January		1,800		$	11,700
February		1,600			11,300
March		1,300			11,250
April		1,000			10,200
May		2,200			11,100
June		2,400			12,550
July		2,000			12,000
August		1,800			11,400
September		2,600			12,120
October		1,100			11,050
November		1,200			11,350
December		1,400			11,350

Required:

5.	Estimate the material-handling departments cost behavior using the high-low method. Use an equation to express the results of this estimation method. (Round coefficient of X to 2 decimal places.)

7-a.	Predict the companys material-handling costs for a month when 2,250 units of activity are recorded. Using High-low method.

7-b.

Which prediction would you prefer to use?

	High-low method
	Visually-fit cost line