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Michael Scott works as a cost analyst for mid-size paper company. He collected the following information concerning the operations of the Machining Department:
Observation Machine-hours Total Operating Costs
January 4,000 $45,000
February 4,600 49,500
March 3,800 45,750
April 4,400 48,000
May 4,500 49,800
Required
Problem a. Use the high-low method to determine the estimating cost function with machine-hours as the cost driver.
Problem b. If June's estimated machine-hours total 4,200, what are the total estimated costs of the Machining Department?
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