Question

Cycle Accessories manufacturers cellphone holders that can be mounted on the handle bars of most motorcycles. The manufacturing process is highly automated and management feels that machine-hours are likely the main driver of overhead costs. Data from the most recent year are shown below.

Month	Machine-Hours	Overhead Costs
January	2,800	$	57,500
February	2,860		60,620
March	3,100		67,100
April	3,820		73,220
May	4,000		75,210
June	4,600		75,480
July	5,200		83,970
August	5,800		84,260
September	5,500		81,340
October	4,000		73,880
November	3,160		68,730
December	5,200		81,270

Required:

1. Using least-squares regression, estimate the fixed cost and variable cost elements of monthly overhead costs. Estimate the fixed cost element to the nearest dollar and the variable cost element to the nearest cent.

(can you please show your work? I want the answer but also know how you got the answer, Thank you.)

2. If the company expects to use 4,300 machine-hours next month, estimate total overhead costs.

Answer 1