Bates Company, which uses the high-low method to analyze cost behavior, has determined that machine hours best predict the company's total utilities cost. The company's cost and machine hour usage data for the first six months of the year follow:

Requirements
Using the high-low method, answer the following questions:
1. What is the variable utilities cost per machine hour?
2. What is the fixed cost of utilities each month?
3. If Bates Company uses 1,200 machine hours in a month, what will its total costs be?

Transcribed Image Text:

Machine Hours Month Total Cost 1,080 1,160 1,030 1,230 1,360 1,460 $3,420 January $3,760 $3,388 $3,780 February March April $4,000 May June $4,076