The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization. The managerial accountant reported the following information:

Sunny Manufacturing

Cost Report

January - June 20XX

Month Machine-Hours Total Costs

January 1,800 $21,500

February 2,900 $23,200

March 1,000 $19,750

April 2,400 $21,000

May 3,400 $23,900

1. Use the high-low method to determine the cost equation and use machine hours as the base for a cost driver in the analysis.