Estimate the companys electricity cost behaviour

Reference no: EM133064225

Question: The Longreach Factory has determined machine hours to be the cost driver of the company's electricity costs. The number of machine hours is provided in the Table along with the electricity costs for the first half of 2011.

Month	Machine Hours Electricity Cost	S.
January	780	8 200
February	720	8 360
March	800	8 950
April	900	9 360
May	950	9 625
June	920	9 150

Required:

1) Use the high-low method to estimate the company's electricity cost behaviour and express it in equation form;

2) Predict the electricity cost when 850 machine hours were used.

Reference no: EM133064225

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