(High-low; least squares regression) LaSalle Company manufactures insulated windows. The firm’s repair and maintenance (R&M) cost is mixed and varies most directly with machine hours worked. The following data have been gathered from recent operations:

a. Use the high-low method to estimate a cost formula for repairs and maintenance.

b. Use least squares regression to estimate a cost formula for repairs and maintenance.

c. Does the answer to part

(a) or

(b) provide the better estimate of the re-
lationship between repairs and maintenance costs and machine hours? Why?LO1.

Transcribed Image Text:

Month MHs R&M Cost May 1,400 $ 9,000 June 1,900 10,719 July 2,000 10,900 August 2,500 13,000 September 2,200 11,578 October 2,700 13,154 November 1,700 9,525 December 2,300 11,670