=+3-27 KK Regression analysis, service company (CMA, adapted) OBJECTIVES 4, 5 Bob White owns a catering company that prepares food and beverages for banquets and parties. For a standard party the cost on a per-person basis is:

Food and beverages $15 Labour (0.5 hour × $10 per hour) 5 Overhead (0.5 hour × $14 per hour) 7 Total cost per person $27 Bob is quite certain about his estimates of the food, beverages and labour costs but is not as comfortable with the overhead estimate.

The overhead estimate was based on the actual data for the past 12 months, which are presented here. These data indicate that overhead costs vary with the direct labour-hours used. The $14 estimate was determined by dividing total overhead costs for the 12