Reference no: EM132970854

The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization. The managerial accountant reported the following information:

Sunny Manufacturing
Cost Report
January - June 20XX
Month Machine-Hours          Total Costs
January            1,800                  $21,500
February             2,900               $23,200
March                1,000                $19,750
April                    2,400                 $21,000
May                    3,400                 $23,900

Problem 1: Use the high-low method to determine the cost equation and use machine hours as the base for a cost driver in the analysis.