Jackson 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.

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 Jackson Company uses 1,280 machine hours in a month, what will its total costs be?

Month January........ February. March........ April ....... May........ June....... Total Cost $3,200 $3,700 $3,500 $3,780 $4,000 $4,300 Machine Hours 1,000 1,150 1,075 1,200 1,350 1,400