Company XYZ is in its first year of operations and management is not sure yet how to best estimate its overhead costs for planning purposes. It is trying to decide whether it should use machine hours or kilowatt-hours to estimate and predict its total overhead costs. Here is the data the company collected for its first six months of operations:

Month	Total Overhead Costs	Machine hours	Kilowatt hours
January	$417,600	4,560	5,424,000
February	$406,700	4,380	5,208,000
March	$420,480	4,680	5,400,000
April	$404,160	3,960	5,148,000
May	$391,200	3,900	5,040,000
June	$384,000	3,720	4,944,000

1. Use the high-low method to estimate the cost function for total overhead costs using machine hours as the cost driver.

2. Use the high-low method to estimate the cost function for total overhead costs using kilowatt hours as the cost driver.

3. In July, Company XYZ expects to use 4,000 machine hours and 4,650,000 kilowatt hours.

a. Use the cost function you estimated in question 13 to predict the total overhead costs in July.

b. Use the cost function you estimated in question 14 to predict the total overhead costs in July.

c. Assume the total overhead costs in July were actually $360,000. Which cost driver was the best predictor of the total overhead costs for July?