Estimating Cost Behavior Using Least-Squares Regression Method Sigrid's Custom Graphics specializes in creating and painting store window advertisement displays. The majority of its business comes from local retailers and fast-food restaurants A portion of Sigrid's aperating information for the past year follows: Number of Window Displ eys Operating Cost $1,540 1,720 2,100 2.675 3,250 3,760 3,270 3.220 2,980 2.090 1,950 2,925 42 75 81 September 80 58 December Required: I. Perform a least-squares regression analysis on Sigrid's data. 2. Using the regression output, create a linear equation - a hax) for estimating Sigrid's operating costs. 3. Using the least-squares regression results, calculate the store's expected operating cost if it paints 96 windows. 4. Consider the pattern of the company's activity and costs throughout the year. Would you consider this to be a seasonal business? Explain your answer and how this information could impact the relative proportion of fixed and variable costs for the business. s. Using your cost estimates obtained with the high-low and regression methods, predict the store's operating costs for the upcoming months based on the following expected sales levels: Month Expacted Number of Wndew January February 48 70 76 87 85 June Explain why there are differences between cost predictions based on the high-low method and on least- squares regression. Which do you think is more accurate? Why? Using the regression results, prepare contribution margin income statements for January through June. Assume that the business charges $80 per window on average. 6. 7