Hig-low method to estimate companys utilities cost behavior

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Reference no: EM13165254

A company incurred the following monthly utility costs last year:

In January , 11,000 pounds of the product produced, at a cost of $5,500

In February, 9,000 pouds of the product produced, at a cost of 4,500

In March, 8,000 pound of the product produced, at a cost of 4,300

In April, 10,000 pounds of the product produced, at a cost of 5,000

In May, 13,000 pounds of the product produced, at a cost of 6,500

In June, 14,000 pounds of the product produced, at a cost of 7,200

In July, 7,000 pounds of the product produced, at a cost of 3,500

In August, 6,000 pounds of the product produced, at a cost of 3,200

In September, 5,000 pounds of the product produced, at a cost of 3,400

In October, 4,000 pound of the product produced, at a cost of 2,400

In November, 8,000 pounds of the product produced, at a cost of 4,200

In December, 10,000 Pouds of the prduct produced, at a cost of 4,900

a- Use the hig-low method to estimate the company's utilities cost behavior and state the cost formula.

b- Predict the utilities cost for a month in which 12,000 pounds of the product were produced.

Reference no: EM13165254

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