First Welding Company provides welding services for a variety of industrial customers. The number of jobs completed from one month to the next varies considerably, and jobs differ in terms of the complexity of the welding requirements. More complex jobs can take significantly longer to complete. Management knows that overhead costs have a fixed and a variable component but, until now, has not attempted to determine which measure of activity should be used for planning and forecasting. The table below shows data for the most recent fiscal year. Management believes that either the number of jobs completed each month, or the number of direct labour-hours incurred each month could be used as the activity base. However, they are not sure which is more appropriate: Direct Month Overhead Labour- Jobs Costs Hours Completed January $76,245 5,981 500 February $70,691 4,748 350 March $73,193 5,190 400 April $82,417 6,666 550 May $48,762 3,114 200 June $69,564 4,357 250 July $79,551 6,200 500 August $82,782 8,514 600 September $78,891 6,308 500 October $69,555 4,824 350 November $71,086 5,100 December $84,634 6,900 400 510 Overhead includes costs such as the maintenance supervisor's salary, depreciation on the welding equipment, and indirect materials used on each job. Electricity costs are also included in overhead and are significant since welding equipment consumes a relatively high amount of energy. Waverley Welding also employs a mix of experienced and inexperienced welders. Experienced welders are paid a higher hourly wage but are more efficient and tend to incur less wastage of indirect materials. Inexperienced welders are of course paid less on a per hour basis but work more slowly and use more indirect materials. Required: 1. Use the High-Low Method to estimate a cost formula for overhead costs a. Use direct labour hours as the activity base. b. Use number of jobs completed as the activity base 2. Use the Simple Regression Method by spreadsheet to estimate a cost formula for overhead costs a. Use direct labour hours as the activity base. b. Use number of jobs completed as the activity base 3. Create Scatter charts for 2a and 2b