Patrick Ross, the president of M & M Materials Company, has asked for information about the cost behavior of manufacturing overhead costs. Specifically, he wants to know how much overhead cost is fixed and how much is variable. The following data are the only records available:
Month Machine-hours Overhead Costs February 1,870 $22,500 March 3,080 24,475 April 1,200 24,321 May 2,750 23,650 June 3,700 31,196
Required: Using the high-low method, determine the MONTHLY overhead cost equation. (Use machine-hours as your cost driver.)
