Stella Services has a customer website to take orders, answer customer questions, and address customer complaints. The costs associated with this customer website over the past six months are listed below:
| Month | Customer website costs | Number of website hits |
| January | $15,000 | 9,000 |
| February | $15,400 | 9,200 |
| March | $16,000 | 10,200 |
| April | $15,950 | 9,700 |
| May | $14,500 | 8,200 |
| June | $14,800 | 8,800 |
Management at Stella Services believes that the customer website costs are a mixed cost and would like to use the high-low method to estimate their future costs using the number of website hits in any given month as the cost driver.
Required:
| 1. | Using the high-low method, estimate the variable cost per website hit and the monthly fixed |
costs associated with the customer website.
| 2. | Write the cost equation for estimating the customer website expenses for Stella Services using |
the results from Requirement 1.
| 3. | If Stella Services expects 9,500 website hits for July, what are their anticipated customer website |
costs for July?
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