Berg Industries is in the process of analyzing its manufacturing overhead (MOH) costs. Berg is trying to figure out if the number of units produced or the number of direct labor hours is the best cost driver (i.e., activity base) to use for predicting MOH costs. The following information is available: Month Manufacturing Overhead Costs # of Direct Labor Hours # of Units Produced July $463,000 23,100 3,620 August 513,000 26,500 4,300 September 435,000 20,000 4,230 October 450,000 21,400 3,380 November 562,000 30,000 5,790 December 438,000 20,500 3,300 Berg plotted its MOH costs against direct labor hours and the scattered plot is as follows: Q1. Are Berg's manufacturing overhead costs fixed, variable, or mixed? Explain. Q2. Do the data appear to be sound or do you see any potential data problems? Explain. Q3. Assume that Berg decides to use the number of direct labor hours to predict MOH costs. Use the high-low method to determine the cost equation for Berg (rounded to one decimal). Q4. Based on the cost equation from Q3, estimate MOH costs if Berg Industries incurs 25,500 direct labor hours in January. Berg Industries then conducted regression analysis to determine Berg's MOH cost equation using direct labor hours as the cost driver. The results are as follows: Q5. Based on the regression results, write the cost equation for Berg (rounded to one decimal). Q6. Based on the regression results, estimate MOH costs if Berg Industries incurs 25,500 direct labor hours in January (rounded to one decimal). For comparison, Berg Industries also conducted regression analysis to determine Berg's MOH cost equation using the # of units produced as the cost driver. The results are as follows: Q7. Based on the regression results, write the cost equation for Berg (rounded to one decimal). Q8. Based on the regression results, estimate MOH costs if Berg Industries produces 5,200 units in January (rounded to one decimal). Q9. Which cost equation is more reliablethe one from Q7 or the one from Q5? Why?