The controller of Gutierrez 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 2,000 -hour increments and \(\$ 1,000\) cost increments.

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