Cost Estimation Techniques  
a. Discuss the methods of cost estimation, including the high-low method, scattergraph method, and least squares regression analysis. Explain when each method is appropriate and the assumptions underlying their use.
b. ABC Manufacturing Company is analyzing its utility costs and production levels over the past six months. The following data is available:
•January: 1,000 units produced, utility cost $4,000
•February: 1,200 units produced, utility cost $4,800
•March: 1,500 units produced, utility cost $6,000
•April: 1,300 units produced, utility cost $5,200
•May: 1,400 units produced, utility cost $5,600
•June: 1,100 units produced, utility cost $4,400
Using the high-low method, estimate the variable and fixed components of the utility cost. Provide a cost equation and discuss its reliability.