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The controller of Menno Corp. (Menno) presented the following observations in a general ledger account called Maintenance: Month Machine hours Maintenance costs incurred January 6,000
The controller of Menno Corp. (Menno) presented the following observations in a general ledger account called Maintenance:
Month Machine hours Maintenance costs incurred January 6,000 $4,000 February 8,000 3,750 March 8,500 4,900 April 9,000 5,800 May 7,000 4,400 June 10,000 5,400
a) Using the high-low method, determine the cost equation for Mennos monthly maintenance costs. (5.5 marks)
b) If Menno expects 9,500 machine hours next month, determine what its anticipated maintenance costs would be. (1.5 marks)
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