Can you help answer the following questions, noting the attached information: 1. Prepare a scatter graph plot that puts labor hours on the x axis and overhead expenses on the y axis. What insights are revealed by the scatter graph? 2. Use the least squares regression method to estimate the fixed and variable components of overhead expenses. Express the estimates in the form y = a + bX 3. Estimate the contribution to profit of a standard 180 guest cocktail party if Chavez charges her usual price of $31 per guest (in other words, by how much would her overall profit increase?) 4. How low could Chavez bid for the charity event in terms of a price per guest and still not lose money on the event itself? 5. The individual who is organizing the charity's fund raising event has indicated that he has already received a bid under $300 from another catering company. Do you think Chavez should bid below her normal $31 per guest price for the charity event? Why or why not?

CASE 2A-5 Analysis of Mixed costs in a Pricing Decision [L02-4, LO2-8] Maria Chavez owns a catering company that serves food and beverages at parties and business functions. Chavez's business is seasonal, with a heavy schedule during the summer months and days and a lighter schedule at other times One of the major events Chavez's customers request is a cocktail party. She offers a standard Labor- Overhead cocktail party and has estimated the cost per guest as follows: Hours Expenses 55,000 Month January Food and beverages 59,000 $15.00 February Labor (0.5 hrs. $10.00/hr) 5.00 60,000 March overhead (0.5 hrs. $13.98/hr.) 64,000 Total cost per guest $26.99 67,000 71,000 74,000 July The standard cocktail party lasts three hours and Chavez hires one worker for every six guests, 77,000 7,500 so that to hour of labor guest. These workers are hired only as needed and are paid only for the hours they actually work 7,000 75,000 4,500 68,000 When bidding on cocktail parties, Chavez a 15% markup to yield a price of abou November 3,100 62,000 mates of the costs of food and beverages and S31 per guest. She is confident about labor but is not as comfortable with the estimate of overhead cost. The $13.98 overhead cost 73,000 per labor-hour was determined by dividing total overhead expenses for the last 12 months total bor-hours for the same period. Monthly data concerning overhead costs and labor hours follow Total 57,600 $805,000 cocktail party to be Chavez has received a request to bid on a 180-guest last usual three hours given next local (The party would the includes m like to win this contract because the guest list for this charity event that prominent individuals that she would like to land as future clients. Maria is confident ese potential customers would favorably impressed by her company's services at charity event