You have been hired as a consultant for Jones Inc. The company manufactures high-density compact disks and sells them to a wide variety of business clients. Management is eager to learn more about the company's cost behavior. You have been provided the following data. Assume all production falls within the relevant range.

Required:
1. Using the high-low method, compute the variable and fixed elements of Jones' utility costs.
2. Plot the information on a scattergraph. Based on your graph, determine the unit variable cost and monthly fixed costs.
3. Interpretive Question: Why are the variable cost per unit and fixed costs different for each of these methods of analysis? Which method is the most accurate for determining variable and fixed costcomponents?

Utility Costs Month Machine Hours January February March April May June 290 280 S10,700 10,400 320 340 350 11,600 12,100 12,400 10,750 10,800 10,900 11,200 12,200 10,600 11,000 290 300 July August September October 300 310 340 Novermber December 290 310