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Hartman Company's Lucas plant manufactures thermostatic controls. Plant management has experienced fluctuating monthly overhead costs and wants to estimate overhead costs accurately to plan its

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Hartman Company's Lucas plant manufactures thermostatic controls. Plant management has experienced fluctuating monthly overhead costs and wants to estimate overhead costs accurately to plan its operations and its financial needs. Interviews with plant personnel and studies reported in trade publications suggest that overhead in this industry tends to vary with labor hours. A member of the controller's staff proposed that the behavior pattern of these overhead costs be determined to improve cost estimation. Another staff member suggested that a good starting place for determining cost behavior patterns is to analyze historical data. Following this suggestion, monthly data were gathered on labor hours and overhead costs for the past two years. No major changes in operations occurred over this period of time. The data are shown in the following table: the followi Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Labor-Hours Overhead Costs 251,690 $2,741,920 238,590 2,375,580 193,300 2,400,500 271,650 2,590,910 324,150 3,072,170 291,090 2,618,520 271,650 2,480,590 251, 710 2,745,910 232, 075 2,821,700 343,800 3,438,060 186,090 2,357,690 232,040 2,551, 030 382,960 3,604,070 376,650 3,405, 140 291,080 3,016,850 396,090 3,638,690 356,710 3,554,250 323,910 3,191,970 389,535 3,482,070 317,340 3, 219,870 343,600 3,495,780 337,030 3,207,610 382,970 3,600,980 376,410 3,637,000 Required: a. Use the high-low estimation method to estimate the overhead cost behavior (fixed and variable portions components of cost) for the Lucas plant. (Round variable cost per unit to 2 decimal places.) Overhead Costs per LH Labor hours c. Using Excel, compute regression coefficients to describe the overhead cost equation (Round your answers to 2 decimal places.) Coefficients Intercept (Fixed costs) Cost per Labor Hour a. Use the high-low estimation method to estimate the overhead cost behavior (fixed and variable portions components of cost) for the Lucas plant. (Round variable cost per unit to 2 decimal places.) Overhead Costs per LH x Labor hours c. Using Excel, compute regression coefficients to describe the overhead cost equation, (Round your answers to 2 decimal places.) Coefficients Intercept (Fixed costs) Cost per Labor Hour d. Use the results of your regression analysis to develop an estimate of overhead costs assuming 430,000 labor hours will be worked next month. (Round Cost per Labor hour to 2 decimal places.) Ovothaad Cost

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