Michael Paul, a small service firm, uses the high-low method to estimate electricity cost, which varies in relation to machine hours as follows:

Month	Machine hours	Electricity expense
May	110	$2,750
June	116	$2,900
July	105	$2,650
August	140	$3,350

Required:

1. Using the high-low method identify the month that represents:

(a) the highest point and (0. 5 mark)

(b) the lowest point (0. 5 mark)

2. Calculate the following:

(a) The variable cost rate per machine hour of electricity (1.5 mark)

(b) The total fixed cost per month (1.5 mark)

3. Write the cost formula for Michael Paul. Using the cost formula, calculate the total electricity cost assuming the plant plans to use 200 machine hours in June. (1 mark)