Problem 1

The controller of Teton Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Month	Total Maintenance Costs	Total Machine Hours
January	$2,900	300
February	3,000	400
March	3,600	600
April	4,300	790
May	3,200	500
June	4,500	800

Instructions

Determine the fixed and variable cost components using the high-low method.

What would the expected maintenance costs be for July assuming the company expects to operate at a level of 920 machine hours?