Part A: Reichow Company produces widgets using an automated system. Jaiden is preparing financial statements for the upcoming year and needs to forecast monthly utility costs based on projected production. Based on past experience, she knows that Total Utility Expenses are a function of machine-hours (Note: machine-hours is the activity level).

Data from the previous year: Utility Expenses for Previous Year Month Machine Hours Cost of Utilities January 408 $ 3,182 February 372 $ 3,420 March 254 $ 3,009 April 251 $ 3,053 May 371 $ 3,337 June 412 $ 2,572 July 305 $ 2,843 August 375 $ 3,184 September 370 $ 3,319 October 431 $ 3,766 November 399 $ 3,341 December 298 $ 3,407 Using the high-low method, calculate the following: 1) Variable cost per machine hour. 2) Monthly fixed costs (round to the nearest dollar). 3) Write the cost formula that can be used to predict total utility costs for different activity levels. Part B: Using this information prepare a Contribution Format Income Statement based on the following: For the month of March in the upcoming year, Jaiden predicts the company will use 285 machine-hours to produce 5,000 widgets. Widgets sell for $10 each. Variable costs other than utilities total $22,000. Fixed costs other than utilities are $8,000.