Charlene has been in the business of servicing computers and computer systems at affordable prices for just over five years. Her company's primary clients are local businesses but include some residential customers. Their advertised approach is to analyze the problem, develop a range of IT options, explain their specific recommendation to the customer, and finally estimate the time and costs associated with the service prior to commencing work. Their approach has proven successful, but competition is getting much stiffer, and Charlene is concerned that her approach to determining costs for any particular job is not correctly incorporating all of the company's indirect costs. She asks her accountant to create an allocation system for assigning indirect costs to jobs. Her accountant decided to implement a single-driver allocation system and needed to develop a reliable cost function to estimate total indirect costs (the numerator of the single driver allocation rate). The accountant plans to use service hours as the cost driver in the allocation process and as the activity measure in the cost function. She estimated the parameters of the indirect cost function by analyzing the behavior of last month's indirect costs, when the company spent 290 service hours repairing 31 computer systems. Here are the results of her analysis: Cost Item Utilities Office rent Administration Supplies Training Total Fixed Cost Variable Cost $260 $89 3,408 0 3,397 161 0 3,439 334 $7,399 306 $3,995 After giving it some more thought, the accountant was somewhat concerned that last month may not have been a typical month, so she created a different set of cost function parameters using the high-low method. She collected total cost and activity data from the last six months; the following were for the two months when total indirect costs and activity were at the lowest and the highest levels: Total indirect costs Service hours Computer systems serviced Next month, Charlene expects the company to spend 420 hours solving 49 clients' computer system problems. REQUIRED [ROUND ALL PER-UNIT COSTS TO TWO DECIMAL PLACES.] Part A [5 tries; 5 points] If the accountant uses the cost function based on her analysis of last month's costs, what is her estimate of total indirect costs next month? Submit Answer Tries 0/5 Part B [5 tries; 5 points] If the accountant uses the cost function based on the high-low method, what is her estimate of total indirect costs next month? Submit Answer Tries 0/5 low month $8,348 229 29 high month $11,062 560 69