Madrigal Theater Company is interested in estimating fixed and variable costs. The following data are available:

Required
a. Use the high-low method to estimate fixed cost per month and variable costs per ticket sold [i.e., estimate a and b in the equation Cost = a + (b x # of tickets) using the high-low method].
b. Madrigal Theater Company is considering an advertising campaign that is expected to increase annual sales by 14,000 tickets. Assume that the ticket selling price is $25.Ignoring the cost of the advertising campaign, what is the expected increase in profit associated with the advertising campaign?
c. (optional) Repeat part a using regression analysis. In light of the result, how would you answer partb?

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Cost $172,000 195,000 212,000 217,000 209,500 191,500 185,000 155,000 194,500 202,000 207,000 230,000 No. of Tickets Sold January February March April May June July August September October November December 20,000 23,000 27,000 29,000 29,500 23,500 22,000 17,000 24,500 26,000 30,000 32,000