1. The controller of Norton Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs. total total
Month Maintenance Machine Hours
1 $2700 300
2 3000 350
3 3600 500
4 4500 690
5 3200 400
6 5500 700
(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.
2. The controller of Hall Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.
total total
Month Maintenance Costs Machine Hours
1 2460 3500
2 3000 4000
3 3600 6000
4 4500 7900
5 3200 5000
6 4620 8000
(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.