High-tex Engineering Company Limited wishes to set flexible budgets for each of its operating departments. A separate maintenance department performs all routine and major repair works on the companys equipment and facilities. The company has determined that maintenance department performs all routine and major repair works on the company's equipment and facilities. The company has determined that maintenance cost is primarily a function of machine hours worked in the various production departments.
The maintenance cost incurred and the actual machine hours worked during the months of January, February, March and April 2019 were as follows:
Month Machine hours in Production departments Maintenance department's Costs
January 800 350
February 1,200 350
March 400 150
April 1,600 550
Required: Determine the cost estimation function using High-low method.