Bailey Nickles, managing director of the Victoria Contractors Group, is examining how overhead costs behave with changes in monthly professional labour$-$hours billed to clients. Assume the following historical data:

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Required

Requirement $1.$ Compute the linear cost function, relating total overhead cost to professional labour$-$hours, using the representative observations of $3,000$ and $6,000$ hours. Plot the linear cost function. Does the constant component of the cost function represent the fixed overhead costs? Why?

Select the labels for the cost function using the representative observations of $3,000$ and $6,000$ hours.