Compute fixed and variable portions of the maintenance costs

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Question - ABC Company maintains a heavy schedule of maintenance for its fleet of trucks. It regularly checks its cost behavior every six months. The following information from the company is presented below:

Month

Hours Maintenance

Cost

January

53,000

$600,000

February

55,000

700,000

March

47,000

550,000

April

51,000

650,000

May

45,000

500,000

June

49,000

610,000

Required -

A. Using High-Low method, compute the fixed and variable portions of the maintenance costs.

B. Provide the predictive equation derived from the data above.

C. Using the predictive equation, predict what the total cost would be at 60,000 hours of maintenance.

Reference no: EM132744022

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