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The controller of Rather Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs.

	Total Electricity Costs	Total Machine Hours
January	$2,500	300
February	3,000	350
March	3,600	500
April	4,500	690
May	3,200	400
June	4,900	700
July	4,100	650
August	3,800	520
September	5,100	680
October	4,200	630
November	3,300	350
December	5,860	720

1. Determine the fixed- and variable-cost components using the high-low method.
2. What electricity cost does the cost equation estimate for a level of activity of 500 machine hours? By what amount does this differ from Marchs observed cost for 500 machine hours?
3. What electricity cost does the cost equation estimate for a level of activity of 700 machine hours? By what amount does this differ from Junes observed cost for 700 machine hours?