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The Madison Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Mortise has heard
The Madison Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. Mortise has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation.
| Month | Cost | Hours |
| January | $36,200 | 3,100 |
| February | 34,700 | 2,500 |
| March | 32,480 | 2,800 |
| April | 34,200 | 3,000 |
| May | 66,200 | 5,650 |
| June | 41,200 | 3,750 |
| a. | What is the slope coefficient? |
| b. | What is the constant for the estimated cost equation? |
| c. | What is the estimated cost function for the above data? |
| d. | What is the estimated total cost at an operating level of 2,700 hours? |
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