Problem 6-41 Work Measurement; Cost Estimation with Different Methods; Wholesaler (LO 6-1, 6-2, 6-5, 6-6)

Marthas Vineyard Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The companys controller, Mathew Knight, has recently completed a cost study of the firms material-handling department in which he used work measurement to quantify the departments activity. The control factor unit used in the work-measurement study was hundreds of pounds of equipment unloaded or loaded at the companys loading dock. Knight compiled the following data.

	Units of Activity
Month	(hundreds of pounds of equipment loaded or unloaded)			Material-Handling Department Costs
January		1,400			$	11,350
February		1,200				11,350
March		1,100				11,050
April		2,600				12,120
May		1,800				11,400
June		2,000				12,000
July		2,400				12,550
August		2,200				11,100
September		1,000				10,200
October		1,300				11,250
November		1,600				11,300
December		1,800				11,700

Required: 5. Estimate the material-handling departments cost behavior using the high-low method. Use an equation to express the results of this estimation method. (Round coefficient of X to 2 decimal places.)