The Ramon Company is a manufacturer that is interested in developing a cost formula to estimate the fixed and variable components of its monthly manufacturing overhead costs. The company wishes to use machine-hours as its measure of activity and has gathered the data below for this year and last year:

	Last Year				This Year
Month	Machine- Hours	Overhead Costs			Machine- Hours	Overhead Costs
January	23,000	$	88,000		23,000	$	90,000
February	28,700	$	119,000		27,700	$	113,000
March	25,700	$	91,500		26,700	$	95,000
April	26,700	$	92,000		25,700	$	89,000
May	24,200	$	83,500		19,450	$	82,000
June	18,900	$	85,500		17,900	$	86,500
July	16,000	$	80,500		14,000	$	77,500
August	10,900	$	74,500		15,000	$	76,000
September	19,100	$	79,000		17,000	$	83,500
October	19,000	$	85,000		17,100	$	82,500
November	18,000	$	81,500		17,000	$	81,000
December	18,100	$	88,000		17,900	$	85,000

The company leases all of its manufacturing equipment. The lease arrangement calls for a flat monthly fee up to 19,000 machine-hours. If the machine-hours used exceeds 19,000, then the fee becomes strictly variable with respect to the total number of machine-hours consumed during the month. Lease expense is a major element of overhead cost.

Required:

1.	Using the high-low method, estimate a manufacturing overhead cost formula based on the data given above for last year and this year. (Do not round your intermediate calculations. Round the Variable cost per DLH to 2 decimal places.)

4.	Assume that the company consumes 24,500 machine-hours during a month. Using the high-low method, estimate the total overhead cost that would be incurred at this level of activity. Be sure to consider only the data points contained in the relevant range of activity when performing your computations. (Do not round intermediate calculations.)