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Nations Capital Fitness, Inc. operates a chain of fitness centers in the Washington, D.C., area. The firms controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firms equipment maintenance costs must be determined. The accounting staff has suggested the use of the high-low method to develop an equation, in the form of Y = a + bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows:

Month	Hours of Maintenance Service				Maintenance Costs
January		530			$	5,260
February		450				4,180
March		250				2,740
April		460				4,330
May		360				3,060
June		460				4,120
July		360				3,010
August		410				3,570
September		480				4,040
October		360				3,260
November		350				3,230
December		360				3,050
Total		4,830			$	43,850
Average		403	*		$	3,654	*

*Rounded

1. Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nations Capital Fitness, Inc. Express the cost behavior pattern in equation form. (Round coefficient of X to 2 decimal places and other answer to the nearest whole dollar amount.) Monthly Maintenance Cost = _______ + ______X

2. Using your answer to requirement (1), what is the variable component of the maintenance cost? (Round your answer to two decimal places.)

3. Compute the predicted maintenance cost at 680 hours of activity.

4. Compute the variable cost per hour and the fixed cost per hour at 690 hours of activity. (Round your answers to 2 decimal places.)