Estimate the total variable electricity costs

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Madison Company manufactures major appliances. Because of growing interest in its products, it has just had its most successful year. In preparing the budget for next year, its controller compiled the following information:

Month

Volume in Machine Hours

Electricity Cost

July

6,000

$  60,000

August

5,000

53,000

September

4,500

49,500

October

4,000

46,000

November

3,500

42,500

December

3,000

36,000

Six-month total

26,000

$287,000

Using the high-low method, determine the variable electricity cost per machine hour and the monthly fixed electricity cost. Estimate the total variable electricity costs and fixed electricity costs if 4,800 machine hours are projected to be used next month.

Reference no: EM13889981

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