The controller of Furgee Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Instructions

(a) Determine the fixed- and variable-cost components using the high-low method.

(b) Prepare a graph showing the behavior of maintenance costs, and identify the fixed and variable-cost elements. Use 100-hour increments and $1,000 cost increments.

Transcribed Image Text:

Total Maintenance Costs Total Machine Hours 300 350 500 690 400 700 Month January February March April May June $2,500 3,000 3,600 4,500 3,200 4,900