Reference no: EM132990797
Jaimie is the accountant for Albedo Inc. manufactures. She has been asked to provide estimate of the company's maintenance cost for the next year.
Jaimie has identified labour hours as the most suitable cost driver and gathered cost information during the previous 12 months:
Month Maintenance cost Labour hours
January $3,210 2,750
February 4,650 3,900
March 6,000 4,000
April 3,350 2,690
May 3,100 2,500
June 2,950 2,580
July 4,000 1,500
August 2,850 2,500
September 4,120 3,160
October 4,350 3,325
November 3,500 2,780
December 3,775 3,000
Required:
Problem 1. Use the high-low method to estimate the company's maintenance cost behaviour and express it in equation form.
Problem 2. Predict the maintenance cost for a month in which 4,800 labour hours.