1.

Howard, financial analyst at KMW Corporation, is examining the behavior of quarterly maintenance costs for budgeting purposes. Howard collects the following data on machine hours worked and maintenance costs for the past five quarters.

Machine Hours	Maintenance Cost
100,000	$205,000
120,000	240,000
110,000	220,000
125,000	260,000
95,000	200,000

Required:

1. Formulate the cost function from the quarterly data using the high-low and regression methods.

b)Estimate maintenance cost for next three quarters if the forecasted machine hours for the three quarters are 140,000, 80,000, and 170,000 respectively using the two method under „a‟