Strawser Company Is Developing a Cost Function for Its Maintenance

Essay

Strawser Company is developing a cost function for its maintenance costs using the high-low method. The following data have been collected for the past year:
Direct Labour Maintenance
Quarter Hours Costs Incurred
1 5,000 $ 745
2 6,500 820
3 7,000 850
4 8,000 1,000
Calculate the following amounts:
a)The variable cost per direct labour hour
b)The fixed cost
c)The estimated total cost for 9,000 direct labour hours
d)The estimated total cost for 6,000 direct labour hours