Chapter 5, Problem 5.3E

The controller of Norton Industries has collected 6the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Month	Total Maintenance Costs	Total Machine Hours
January	$2,700	300
February	3,000	350
March	3,600	500
April	4,500	690
May	3,200	400
June	5,500	700

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.