a. determind the fixed and varuable cost components using tbe high-low method

b.what electricity cost does the cost equation estimate for a level of activity of 500 machine hours? why what amount does this differ for march's observed cost for 500 machine hours?

c. what electricity cost does the equation estimate for a level of activity of 700 machine hours? bg whag amount does this differ from junes observation cost for 700 machine hours?

I already know:

• Total estimated cost at 5,600 machine hours using the high-low method = $44,900
• Total estimated cost at 5,600 machine hours using linear regression = $32,900

P18.1A (LO 1, 2), AP The controller of Rather Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs. Total Total Electricity Costs Machine Hours January $2,500 300 350 February 3,000 March 3,600 500 April 4,500 690 May 3,200 400 June 4,900 700 650 July 4,100 August 3,800 520 September 5,100 October 4,200 630 November 3,300 350 December 5,860 720 Instructions a. Determine the fixed- and variable-cost components using the high-low method. b. What electricity cost does the cost equation estimate for a level of activity of 500 machine hours? By what amount does this differ from March's observed cost for 500 machine hours? c. What electricity cost does the cost equation estimate for a level of activity of 700 machine hours? By what amount does this differ from June's observed cost for 700 machine hours? 680