Question 2: 8 Marks

The controller of Menno Corp presents you with the following observations in a general ledger account called Maintenance:

Month Machine-hours Maintenance Costs Incurred

January 6,000 $4,000

February 8,000 4,750

March 8,500 4,900

April 9,000 5,000

May 7,000 4,400

June 10,000 5,400

a) Using the high- low method, what is the variable maintenance cost per machine hour at Menno Corp? - (3 Marks)

b) Using the high-low method, what is the monthly fixed maintenance cost at Menno Corp? (2 Marks)

c) Using the high-low method, what will the total monthly manufacturing costs be if Menno Corp produces 7,500 units? (3 Marks)