The Reetz Company has its own photocopying department. Reetz’s photocopying costs include costs of copy machines, operators, paper, toner, utilities and so on. We have the following cost and activity data:

1. Use the high-low method to measure the cost behaviour of the photocopy department in formula form.

2. What are the benefits and disadvantages of using the high-low method for measuring cost behaviour?

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Month 1 2345 2 са со N Total photocopying cost £25,000 29,000 24,000 23,000 28,000 Number of copies 320,000 390,000 300,000 310,000 400,000