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6) BC Logging Corporation is trying to analyze cost behavior of their electricity costs. They have...


6) BC Logging Corporation is trying to analyze cost behavior of their electricity costs. They have determined that machine hours is the best way to predict their electricity costs. The company’s cost and machine hours for the past six months are as follows
Month
Machine Hours
Electricity Cost
1
720
$ 10,436.00
2
650
$ 9,966.00
3
680
$ 10,147.60
4
625
$ 10,750.00
5
600
$ 9,572.00
6
700
$ 10,348.00
a) Use the high-low method to find the variable portion of Total Electricity cost .
b) Calculate the Fixed portion of total Electricity cost.
c) Write out the cost formula for total electricity cost
d) Assuming they forecast 710 machine hours for February, what do you estimate total electricity cost to be?
e) Does the data contain any outliers? Why or why not?

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ekkarill92 answered 2 years ago
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