Question Details

Use the high-low method to determine the estimating cost function


As part of his job as cost analyst, Max Thompson collected the following information concerning the operations of the Machining Department: 

	Observation	Machine-hours	Total Operating Costs
	January	4,700	$43,000
	February	5,060	45,395
	March	4,180	42,535
	April	4,500	43,600
	May	4,250	42,890

Required:
a.	Use the high-low method to determine the estimating cost function with machine-hours as the cost driver.
b.	If June's estimated machine-hours are 4,300, calculate the total estimated costs of the Machining Department? 




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