Schultz Company, which uses the high-low method to analyze cost behaviour, 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:

Using the high-low method, answer the following questions:
Requirements
1. What is the variable utilities cost per machine hour?
2. What is the fixed cost of utilities each month?
3. If Schultz Company uses 1,220 machine hours in a month, what will its total costs be?

Month Total Cost Machine Hours 1,090 1,160 1,040 1,200 1,310 1,440 5 January.$3,420 February....3,720 3,590 April...3,760 4,600 4,086