A. Determine a cost formula for utilities cost using least-squares regression. Express this cost formula in the form Y = a + bX. TONS MINED AS THE INDEPENDENT VARIABLE AND UTILITIES COS ON THE VERTICAL AXIS.

Y=$?+$X Y=B+AX

B. Using direct labor-hours as the independent variable, prepare a scattergraph that plots direct labor-hours on the horizontal axis and utilities cost on the vertical axis.

Y=B+AX

The Hard Rock Mining Company is developing cost formulas for management planning and decision- making purposes. The company's cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base with which the cost might be closely correlated. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information: Direct Labor- Hours Utilities Tons Mined Quarter Year 1: First Cost 24,000 16,000 29,000 21,000 5,900 $ 59,000 3,900 S 54,000 4,900 $ 69,000 6,900 S 84,000 Second Third Fourth Year 2: First 27,00011,300 $ 113,000 34,000 10,300 $ 118,000 9,300 $ 94,000 37,000 12,300 $130,000 Second 39,000 Third Fourth