The controller of Gutierrez Industries has collected the following monthly expense data for use in analyzing the cost behaviour 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 2,000-hour increments and $1,000 cost increments.

Transcribed Image Text:

Month January February March April iay June Total Maintenance Costs $2,800 3,000 3,600 4,500 3,200 5,000 Total Machine Hours 3,000 4,000 6,000 7,900 5,000 8,000