Angie March owns a catering  company that stages banquets and parties for both individuals and companies. The business is seasonal,  with heavy demand during the summer months and year-end holidays and light demand at other times.  Angie has gathered the following cost information from the past year:

Required

a. Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost  per month.

b. Angie has booked 4,200 labor hours for the coming month. How much overhead should she expect  to incur?

c. If Angie books one more catering job for the month, requiring 350 labor hours, how much additional overhead should she expect to incur?

d. Angie recently attended a meeting of the local Chamber of Commerce, at which she heard an  accounting professor discuss regression analysis and its business applications. After the meeting,  Angie enlisted the professor’s assistance in preparing a regression analysis of the overhead data  she collected. This analysis yielded an estimated fixed cost of $47,810 per month and a variable cost  of $3.73 per labor hour. Why do these estimates differ from your high-low estimates, calculated in  part (a)?

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Month Labor Hours Overhead Costs $ 62,000 January February 4,000 3,300 59,000 March 3,400 60,000 April May 4,500 64,000 4,800 67,000 June 6,000 71,000 July August September 80,000 77,000 8,300 8,000 6,900 72,000 October 5,000 68,000 November 3,600 62,000 December 7,000 73,000 Total 64,800 $815,000