Cost analysts for River City Brewing Company have selected the following cost drivers to project mixed costs: volume of
beer produced (in hectoliters, i.e., 1hL = 100 L), total amount of raw materials used (in kilograms), number of batches, volume of water used (in hL), number of cleaning procedures performed (CIPs) and number of new products. Here is the cost data and levels of cost driver activity for 18 months.
Dollars of		Beer	Raw	Number
Total		Produced	Material	of	Water New
Month	Overhead	(hL)	(kg)	Batches	(hL)	CIPs	Products
Jan	57,266	890	13,573	54	6,005	67	-
Feb	61,020	980	15,013	58	6,588	72	1
Mar	64,622	1,091	16,781	65	7,336	81	-
Apr	68,630	1,212	18,551	73	8,002	88	-
May	70,652	1,262	19,370	75	8,435	93	-
Jun	79,927	1,494	23,182	89	9,940	110	2
Jul	82,867	1,557	24,202	95	10,240	106	3
Aug	81,748	1,528	23,797	94	10,326	112	2
Sep	68,820	1,215	18,537	72	8,284	87	-
Oct	66,375	1,145	17,582	69	7,746	85	-
Nov	63,767	1,072	16,369	64	7,168	76	-
Dec	62,255	1,032	15,628	62	6,933	77	-
Jan	56,838	872	13,158	50	5,902	61	1
Feb	61,298	1,006	15,224	60	6,759	75	-
Mar	63,179	1,041	15,763	62	6,990	81	1
Apr	66,107	1,139	17,246	68	7,629	85	-
May	69,759	1,228	18,593	75	8,205	89	1
Jun	76,403	1,397	21,571	84	9,304	100	2
	$ 1,221,533	21,161	324,140	1,269	141,792	1,545	13
Required:
1. Using regression, calculate the x and y components using hL of beer produced as the independent variable and dollars of overhead as the dependent variable.
2. Do you think beer produced is an adequate driver to predict overhead? Why or why not?
3. Using regression, compute the y and x from the above table using number of batches as the independent variable and dollars of overhead as the dependent variable.
4. Which driver appears to be the best and why??
5. Assuming a projected 1,800 hL of beer for next month, compute the projected overhead cost and discuss.