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The management of Mostly Safe Bungee Manufacturing Corporation believes that machine- hours are an appropriate measure of activity for utility costs. Shown below are machine-hours

The management of Mostly Safe Bungee Manufacturing Corporation believes that machine- hours are an appropriate measure of activity for utility costs. Shown below are machine-hours and total utility costs for the past six months:

Machine-Hours Used

Utility Cost

Jan

10,000

$30,000

Feb

14,000

$37,500

Mar

20,000

$50,000

Apr

13,000

$36,200

May

17,000

$41,500

Jun

12,000

$34,300

Assume that the relevant range includes all of the activity levels mentioned in this problem.

Using the high-low method, what is Mostly Safe's estimated total fixed utility cost?

Using the variable and fixed costs calculated from the high-low method, what would total costs be for machine hours used of 15,500?

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