=+3-25 KKK Linear cost approximation OBJECTIVE 4 Terry Jiang, managing director of the Bunbury Consulting Group, is examining how overhead costs behave with changes in monthly professional labour-hours billed to clients. Assume the following historical data:

Total overhead costs Professional labour-hours billed to clients

$335 000 2 000 400 000 3 000 430 000 4 000 472 000 5 000 533 000 6 500 582 000 7 500 Required 1 Calculate the linear cost function, relating total overhead costs to professional labour-hours, using the representative observations of 3000 and 6500 hours. Plot the linear cost function. Does the constant component of the cost function represent the fixed overhead costs of the Bunbury Consulting Group? Why?