Question 2

Ditech Plc employed five engineers at the beginning of January 2022 to make sure there is twenty-four-hour production. The firm incurred the following costs to maintain their highly specialist machinery. Ditech Plc incurred the following costs for the months February to September. Plant activity is best measured by direct labor hours.

Month	Direct labor Hours	Maintenance cost (BWP)
Feb	680	5,840
Mar	760	6,080
Apr	720	5,960
May	640	5,720
Jun	600	5,600
Jul	520	5,360
Aug	440	5,120
Sept	560	5,480

Required

1. Using the high-low method, determine the fixed and variable components of the maintenance costs. [4 marks]
2. Forecast the total cost if estimated direct hours of 950 are to be used in the month of October. [3 marks]
3. Illustrate the following costs classified according to behavior and explain your answer

1. Fixed Costs per unit
2. Variable cost per unit [4 marks]