Business Assignment 5 ACC 122 Name: P6-6B. Least Squares Regression Analysis The management of Digger Inc., is trying to develop a cost formula for its major manufacturing overhead activities. Digger's manufacturing process is highly au- tomated and power costs are a significant manufacturing cost. Cost analysts have decided that power costs are mixed. The costs must be separated into their fixed and variable components so that the cost behavior of the power usage activity can be better understood. Analysts have determined that machine hours drive power usage, thus machine hours are the cost driver for power costs. Nine months of data have been collected and are presented in the chart below: 5 Period Machine Hours Power Cost 5 January 36,000 $ 45,000 February 45,000 $ 60,300 3 March 54,000 $ 67,500 April 39,600 $ 53,064 , May June 2 July August September 37,800 $ 47,250 32,400 $ 43,416 43,200 $ 54,000 50,400 $ 67,536 46,800 $ 58,500 5 Required a. Use the high and low points to estimate a power cost formula. 9 , 1 2