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Alpha Company believes the number of machine hours used directly affects their total electricity costs. Machine hours and electricity costs for 2004 were as follows. Month Machine Hours Electricity Costs January 150 $2,400 February 120 1,700 March 290 3,100 April 430 3,900 May 520 4,500 June 470 4,400 July 570 5,600 August 450 4,900 September 620 5,700 October 370 3,100 November 240 2,800 December 190 2,600 a. Using the high‑low method based on machine hours, develop an estimate of variable electricity costs per machine hour. (Do not throw out any outliers, if present.) b. Using the high‑low method based on machine hours, develop an estimate of fixed electricity costs per month. (Do not throw out any outliers, if present.) c. Using the your answers to a. and b. (above), write the cost formula for estimating monthly electricity costs for Alpha Company (in the format Y=a+bX). d. Using your answer to c. (above), estimate the electricity costs for a month in which 400 machine hours are used. NOTE: This question is NOT our property; we are only suggesting solution of this question.

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