Vargis Corporation has a machining capacity of 217,000 hours per year. Utilization of capacity is normally 85%; it has been as low as 30% and as high as 90%. An analysis of the accounting records revealed the following selected costs:
At a 30% Utilization Rate		At a 90% Utilization Rate			Points
Cost A:
Total	$	457,000			$	457,000
Per hour	$	7.2				?
Cost B:
Total		?			$	1,961,000
Per hour	$	12.5			$	12.5
Cost C:
Total	$	765,000			$	1,347,000
Per hour	$	17			$	9.09
Vargis uses the high-low method to analyze cost behavior.
Required:
A.Classify each of the costs as being either variable, fixed, or semivariable.				2
B. Calculate amounts for the two unknowns (indicated by "?")in the preceding table.			2
C. Calculate the total amount that Vargis would expect at a 85% utilization rate for Cost A, Cost B, and Cost C. 3
D. Develop an equation that Vargis can use to predict total cost for any level of hours within its range of operation.