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What electricity cost does the cost equation estimate

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Question - The controller of Carla Vista Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs.

Total Electricity Costs Total Machine Hours

January $2,650 200

February 3,100 320

March 3,570 450

April 4,750 695

May 3,160 500

June 4,910 750

July 4,130 630

August 3,810 580

September 5,060 680

October 4,390 610

November 3,290 320

December 6,640 770

Required -

What electricity cost does the cost equation estimate for a level of activity of 450 machine hours?

By what amount does this differ from March's observed cost for 450 machine hours?

What electricity cost does the cost equation estimate for a level of activity of 750 machine hours?

By what amount does this differ from June's observed cost for 750 machine hours?

Reference no: EM132659194

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