25) Cari’s Locker Service ran its freezer in January, a slow month, for 200 hours for a total cost of $60,000. In June, a peak month, the freezer ran for 1,000 hours for a total cost of $92,000.
Using the high-low method determine the average cost of running the machine one hour in a month were the freezer ran for 800 hours?
26) A cost analyst collected the following information for the Machining Department:
ObservationMachine-hoursTotal Operating Costs
a.Determine the estimating cost function with machine-hours as the cost driver. Use the high-low method.
b.If December’s estimated machine-hours total 8,400, what is the estimated cost of the Machining Department?