ar a and awns a cater n r ar t at pre ams banqucts and arties r both individual and business fir ctions t ou peak periods, there are extra costs; however, even during nonpeak periods Rand must work more to cover her expenses out the and's business s seasonal with a hm sche uie dunn the summer months and the ynar-end holidays and a light schedule other times ear unn One of the major events Rand's customers request is a cocktall party. She offers a standard cocktail party and has developed the following cost structure on a per-person basis Food and beverages Labor (0.4 $10 per hour) Overhead (0.4 hr$12 per hour) Total cost per person 512.00 4.00 4.80 When bidding on cocktail parties, Rand adcs a 10 percent markup to this cost structure as a profit margin. Rand is quite certain about her estimates of the prime costs but is not as comtortabla with the overhead estimate. This estmate was based on the actual data for the past 12 months presented in the following table. These data indicate that ovemead expenses vary with the directHabor hours expended. The $12 estimate was determined by dividing total overhead expended for the 12 months ($797,000) by total labor hours (65,300) and rounding to the nearest collar Labor Overhead Haurs Expenses February7,100 4,500 7,700 6,000 80 CIDO 51,000 77,000 50,000 46,000 82.000 59.000 71,000 51,000 6,400 76,000 65,300 $797000 3,400 .400 2,500 5,000 5,700 September Rand recendy attended a meeting of the local chamber of commerce and heard a business consultant discuss regression analysis and its business applications. After the meeding. Rand decided to do a regressian analysis af the overhead data she had collected. The following results were Dana Rand owns a catering company that prepares banquels and parties for both individual and business functions throughout the year. Rand's business is seasonal, with a heavy schedule during he summer months and the year-end holidays and a ight schedule at other times. During peak periods, there are ecra sts. however, even during nonpeak periods Rand must work more to cover her expenses. One of the maer events Rand's customers request is a cocktail party. She offers a standard cocktail party and has developed the folowing cost structure an a per-person bass. $12.00 4.00 Food and beverages Labor (0.4 hr$10 per hour Overhead (0.4 hr. $12 par haur) Total cost per person Whan bidding on cocktail parties, Rand adds a 10 peroent mariup to this cost structure as a profnt margin, Rand is quite certain about her estimates of the prime costs but is not as comfortabla with the overhead estimate. This estimate was based on the actuel data for the past 12 months prnsnmnd in h a o n table hesa data indicate that a nrtna d n a sns var w th thn drnct-labor hours on dnd hn 12 tim atn was dne minadby divid ng total overhoad ex en d 0 thi: 12 months 797 c a by tnta latar ho s 5 31 D nd raun n to the nnarnst da r Labor Overhead Hours Expenses 4 000 February 80.000 78.000 51,000 7.000 4,900 6,000 3.400 7,400 46,000 82.000 59,000 71,000 1.000 September 2,500 5,000 Navember, 76,000 5300 $797.000 and ecently attended a meetin a tre acal chamber o oammerce and heard a business consultant discuss e ression an sis and its business ap catoris. A er and decided 0 0regression analysis o the aver eac da a she had oo ec ed The u wn e! meetin resuts were Interoapt (a) Coefficient b) Absorption (full) cost per erson