The controller of Cullumber Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs.

Total

Electricity Costs Total

Machine Hours

January

$2,480 210

February

2,900 340

March

3,520 500

April

4,780 685

May

3,220 420

June

5,000 750

July

4,090 650

August

3,810 510

September

5,110 675

October

4,270 600

November

3,320 340

December

5,840 770

(a)

Correct answer iconYour answer is correct.

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

Fixed-costs

$enter a dollar amount

1220

Variable-costs

$enter a dollar amount

6

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(b)

What electricity cost does the cost equation estimate for a level of activity of 500 machine hours?

Electricity costs $enter Electricity costs in dollars

By what amount does this differ from Marchs observed cost for 500 machine hours?

Amount differ $enter a dollar amount of the difference