1. Draw a scatter diagram of the cost data for the shipping department.2. Estimate the shipping department's cost behaviour using the high-low method. Use an equation to express the results of this estimation method.3. Using the equation estimated in requirement 2 predict the shipping department's costs for a month when loads totalling 4500 kilograms are moved.4. Construct an excel spreadsheet that uses least squares regression analysis to estimate the variables and fixed components for the shipping department costs. 5. Based on the spreadsheet, write the least squares regression equation for the department's costs.6. Using the equation from requirement 5 predict the firm's shipping department's costs for a month when loads totalling 4500 kilograms are moved.7. Why do the cost predictions estimated using the high- low and regression methods differ? Which method do you recommend.

P3.35 Cost estimation; high-low; regression: wholesaler LO 3.9 PipeDream Supplies is a wholesaler of a large variety of pipes and other plumbing needs. The company's accountant, Bobbi Esbend, has recently completed a cost study of the firm's shipping department in which she used the weight of supplies loaded or unloaded at the company's loading dock to quantify the department's activity. Bobbi compiled the following data. Month Supplies loaded or unloaded (kg) Shipping department costs January 5 400 $35 100 February 4 800 33 900 March 3 900 33 750 April 3 000 30 600 May 6 600 33 300 June 7 200 37 650 July 6 000 36 000 August 5 400 34 200 September 7 800 36 360 October 3 300 33 150 November 3 600 34 050 December 4 200 34 050