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Derrick Everett, financial analyst at SQR Corporation, is examining the behavior of quarterly utility costs for budgeting purposes. Everett collects the following data on machine-hours
Derrick Everett, financial analyst at SQR Corporation, is examining the behavior of quarterly utility costs for budgeting purposes. Everett collects the following data on machine-hours worked and utility costs for the past 8 quarters: B (Click the icon to view the data.) Read the requirements. Requirement 1. Estimate the cost function for the quarterly data using the high-low method. (Complete all answer boxes.) (After you hit continue, the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 2. Plot and comment on the estimated cost function. Plot the line for the estimated cost function using the high-low method. The data points for the 8 quarters have already been entered in for you. (Enlarge the graph and use the line button displayed below to draw the graph.) Maintenance Costs Data table Quarter Quarter 1 Quarter 2 Machine-Hours Utility Costs 115,000 $ 245,000 70,000 180,000 Quarter 3 105,000 230,000 130,000 285,000 be the 85,000 Quarter 4 Quarter 5 Quarter 6 Quarter 7 200,000 265,000 120,000 110,000 255,000 Quarter 8 95,000 225,000 Print Done - X x Requirements 1. Estimate the cost function for the quarterly data using the high-low method. 2. Plot and comment on the estimated cost function. 3. Everett anticipates that SQR will operate machines for 120,000 hours in quarter 9. Calculate the predicted utility costs in quarter 9 using the cost function estimated in requirement 1. anc Print Done
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