Goulburn, Incorporated produces parts for heavy equipment used in mining and construction. The plant that produces one part common to many vehicles is highly automated, so all labor is considered part of factory overhead. The plant manager, who has just been promoted, would like to understand how overhead costs fluctuate in order to improve planning and budgets. After discussions with both financial and operations members of the plant staff, there is general agreement that the best cost driver for overhead is machine-hours.

Monthly data were collected from the most recent two years on machine-hours and overhead. More months of data were available, but a process change had taken place about 30 months earlier, so the staff believed any data from before that time would be misleading. The data are shown in the following table:

Month	Machine-Hours	Factory Overhead
1	39,800	$ 527,600
2	37,800	417,000
3	30,600	366,300
4	42,900	498,700
5	51,100	591,200
6	46,000	503,900
7	42,900	477,400
8	62,600	711,150
9	36,800	425,800
10	54,200	661,500
11	53,200	617,200
12	36,800	491,000
13	60,400	693,500
14	59,400	655,200
15	46,000	580,500
16	39,800	528,400
17	56,300	683,900
18	51,100	614,200
19	61,400	670,000
20	50,100	619,600
21	54,200	672,600
22	29,600	445,500
23	60,400	692,900
24	59,400	719,000

Required:

a. Use the high-low estimation method to estimate the overhead cost behavior (fixed and variable components of cost) for the Goulburn plant.

b. Prepare a scattergraph showing the overhead costs plotted against the machine-hours.

c. Use a spreadsheet program to compute regression coefficients to describe the overhead cost equation.

d. Use the results of your regression analysis to develop an estimate of overhead costs assuming 48,000 machine-hours will be worked next month.

NEED ALL WORK SHOWN FOR A, B & C