ator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the companys stores are listed below for the past six months.

Month Total Hours

of Operation Total Utility

Cost

January 500 $ 2,820

February 600 3,200

March 700 3,600

April 450 2,700

May 400 2,350

June 350 2,200

Required:

1-a. Use the high-low method to estimate the cost behavior for the stores utility costs. Express the cost behavior in formula form (Y = a + bX).

1-b. What is the variable utility cost per hour of operation?

3-a. Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the cost behavior for the store's utility cost. Express the cost behavior in formula form.

3-b. What is the variable utility cost per hour of operation?

4. During July, the store will be open 300 hours. Predict the stores total utility cost for July using each of the cost-estimation methods employed in requirements (1) and (3).