1.High-tex Engineering Company Limited wishes to set flexible budgets for each of its operating departments.A separate maintenance department performs all routine and major repair works on the company's equipment and facilities.The company has determined that maintenance department performs all routine and major repair works on the company's equipment and facilities. The company has determined that maintenance cost is primarily a function of machine hours worked in the various production departments.

The maintenance cost incurred and the actual machine hours worked during the months of January, February, March and April 2003 were as follows:

Month Machine hours in Maintenance department's Costs

production department

sh

January 800 350

February 1200 350

March 400 150

April 1600 550

Required:

a)Determine the cost estimation function using:

iHigh-low method.(5 marks)

iiRegression analysis (5 marks)