Employees of the Hotel are drawn from three categories permanent, part-time and casual. The labour cost has been used as the basis for overhead costs allocation as the overhead costs include a large proportion of human resource. The current method is to calculate overhead cost per dollar of labour cost based on last years cost data using the formula Labourcostoverheadcost=$0.048 per labour cost dollar. You have obtained the following data regarding overhead costs and labour activity from the past 12 months. You are concerned that this method may not be appropriate and would like to present to the Board of Management a review of the current method. Required: a) Plot the data on overhead costs and labour costs? (5 marks) b) Determine the cost equation for overheads using i. Labour cost and the following methods (4 marks) - High-low method - Regression analysis ii. Number of employees and the following methods (4 marks) - High-low method - Regression analysis c) Comment on the effectiveness of each method. ( 5 marks) d) Based on your findings above how should overhead be allocated, why? (7 marks) Employees of the Hotel are drawn from three categories permanent, part-time and casual. The labour cost has been used as the basis for overhead costs allocation as the overhead costs include a large proportion of human resource. The current method is to calculate overhead cost per dollar of labour cost based on last years cost data using the formula Labourcostoverheadcost=$0.048 per labour cost dollar. You have obtained the following data regarding overhead costs and labour activity from the past 12 months. You are concerned that this method may not be appropriate and would like to present to the Board of Management a review of the current method. Required: a) Plot the data on overhead costs and labour costs? (5 marks) b) Determine the cost equation for overheads using i. Labour cost and the following methods (4 marks) - High-low method - Regression analysis ii. Number of employees and the following methods (4 marks) - High-low method - Regression analysis c) Comment on the effectiveness of each method. ( 5 marks) d) Based on your findings above how should overhead be allocated, why? (7 marks)