Nutt Industries Electricity Costs and Machine Hours Over a Six-Month

Multiple Choice

Nutt Industries electricity costs and machine hours over a six-month period follow: Using the high-low method, what is the formula that can be used to estimate electricity costs at different levels of volume?

A) Electricity costs = $2,800 + ($1.00 x number of machine hours)
B) Electricity costs = $2,600 + ($1.00 x number of machine hours)
C) Electricity costs = $400 + ($1.67 x number of machine hours)
D) Electricity costs = $3,600 + ($.60 x number of machine hours)