Albedo Inc. manufactures high-end replacement telescope lenses for amateur and professional astronomers who are seeking to upgrade the performance of their telescopes. You have just become employed as a staff accountant at Albedo, and Jordan Coleman, the controller, has asked you to help with maintenance cost estimation for the lens manufacturing process. You review the manufacturing process and decide that the best cost driver for maintenance costs is machine hours. The data below are from the previous fiscal year for maintenance costs and machine hours:

Required

1. What is the cost equation for maintenance costs using the high-low method?

2. Graph the data and comment on whether or not there are potential outliers.

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Month Maintenance Costs Machine Hours $3,210 2,750 2 4,650 3,900 4,050 5,175 3,350 3,100 2,950 4 2,690 2,500 2,580 2,900 2,900 2,300 2,500 4,120 3,160 3,325 4,350 3,500 3,775 11 2,780 12 3,000