The controller of Dousmann Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs.

Instructions

(a) Determine the fixed- and variable-cost components using the high-low method.

(b) Prepare a graph showing the behavior of maintenance costs, and identify the fixed and variable-cost elements. Use 2,000-hour increments and $1,000 cost increments.

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Total Maintenance Costs $2,750 3,000 3,600 4,500 3,200 5,000 Total Machine Hours Month January February March April May June 3,500 4,000 6,000 7,900 5,000 8,000