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?

P5.1A (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 Machine Hours January February March April May June July August September October November December Total Electricity Costs $2,500 3,000 3,600 4,500 3,200 4,900 4,100 3,800 5,100 4,200 3,300 5,860 300 350 500 690 400 700 650 520 680 630 350 720