QUESTION 1 Treetop Company recorded the following information concerning its Manufacturing Overhead costs and machine hours. The president has asked you to determine the relationship between the two so that future costs can be predicted based on the cost equation Required: a. Using the high-low method, determine the fixed costs and the variable rate by using the formula Total Costs = Fixed Costs + (variable rate x units) or Y=a+bX Answer Variable Rate: Fixed Costs: b. Management is predicting that in January 2016, the machine hours will be 550 hours. Based on your work above, the total Manufacturing Overhead costs for January 2016 (total of Fixed + Variable for January 2016) will be Month Number of Machine Hours Manufacturing Overhead Costs January 341 $524,908 February 322 472,640 March 325 479,280 April 496 698,340 May 503 689,948 June 442 654,660 July 351 541,970 June 442 654,660 July 351 541,970 August 480 678,900 September 320 485,720 October 497 673,731 November 428 626,780 December 400 540,500