Machine Hours and Electricity Costs for Wells Industries for the Year

question 61

Essay

Machine hours and electricity costs for Wells Industries for the year 2011 are as follows:
$\begin{array}{lcc} \underline{\text { Month }}& \underline{ \text { Machine Hours }} & \underline{\text { Electricity Costs }}\\\text { January } & 2,000 & \$ 9,200 \\\text { February } & 2,320 & 10,500 \\\text { March } & 1,520 & 6,750 \\\text { April } & 2,480 & 11,500 \\\text { May } & 3,040 & 14,125 \\\text { June } & 2,640 & 11,000 \\\text { July } & 3,280 & 12,375 \\\text { August } & 2,800 & 11,375 \\\text { September } & 1,600 & 7,750 \\\text { October } & 2,960 & 13,000 \\\text { November } & 3,760 & 15,500 \\\text { December } & 3,360 & 13,875\end{array}$
a.Using the high-low method,develop an estimate of variable electricity costs per machine hour.
b.Using the high-low method,develop an estimate of fixed electricity costs per month.
c.Using the high-low method,develop a cost function for monthly electricity costs.
d.Estimate electricity costs for a month in which 3,000 machine hours are worked.

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