1. Evan Kristopher, the president of Kristopher Company has asked for information about the cost behavior of manufacturing overhead costs. Specifically, he wants to know how much overhead cost is fixed and how much is variable. The following data are available:

Month	Machine-hours	Overhead Costs
February	1,700	$20,500
March	2,800	22,250
April	1,000	19,950
May	2,500	21,500
June	3,500	23,950

Required (5 points)

1. Using the high-low method, determine the overhead cost equation. Use machine-hours as your cost driver.
2. A regression analysis was performed on the same data. The following values were identified: Y- intercept of 18,021.80, R² of .941 and X-coefficent of 1.569. Prepare the overhead cost equation based on this analysis.

What is the significance of the R² in part b?