Daisy Wong is the accountant for the Heavy Manufacturing Company. She has been asked by one of Heavy

Daisy Wong is the accountant for the Heavy Manufacturing Company. She has been asked by one of Heavy Manufacturing's senior managers to provide an estimate of the firm's utilities costs using the high-low method. Daisy has identified machine hours as the most suitable cost driver. The following costs were incurred during the previous 12 months: Machine hours Utilities cost Month $35 100 January 52 500 33 150 February 31 500 33 000 March 33 000 33 675 April 36 000 May 34 350 45 000 35 025 June 48 000 42 000 July 60 000 34 200 45 000 August 45 000 34 500 September 34 050 October 42 000 61 500 36 150 November December 58 500 37 425 Required: 1. Use the high-low method to estimate the company's utilities cost behaviour and express it in equation form. 2. Predict the utilities cost for a month in which 39 000 machine hours are used.

 

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