2 High-Low Method; Scattergraph Analysis The following data below relates to units shipped and total shipping expense have been assembled by Macey Company, a wholesaler of large, custom-built solar water heaters for private households: Month January February March April May June July Required: Units shipped 3 6 4 5 7 8 2 Total Shipping Expense $1,800 $2,300 $1,700 $2,000 $2,300 $2,700 $ 1,200 4. 1. Using the high-low method, estimate a cost formula for shipping expense. (8 marks) 2. Express the cost formula as a linear equation in the form Y=a+bX. (2 marks) 3. Assume that 9 units are budgeted for the month of August. Use the cost formula above to calculate: a. The total variable cost for shipping for the month of August (2 marks) b. The total cost of shipping for the month of August. (3 marks) Which method separating mixed cost is most accurate? Provide reasons for your answer based on the strengths and weaknesses of the various methods used for separating mixed costs. (5 marks) 5. The president of the company has no confidence in the high-low method and would like you to check your results using a scattergraph. a. Prepare a scattergraph, using the data given above. Plot cost on the vertical axis and activity on the horizontal axis. Use a ruler to fit a straight line to your plotted points