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Part A (7%) Salter Manufacturing Company produces inventory in a highly automated assembly plant in Fall River, Massachusetts. The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes. For the first six months of operations, the following data were collected: January February March April May June Machine-hours Kilowatt-hours Total Overhead Costs 4,560 5,424,000 $405,600 4,380 5,208,000 404,160 4,680 5,400,000 407,040 3,960 5,148,000 404,160 3,900 5,040,000 391,200 3,720 4,944,000 384,000 Required: a. Use the high-low method to determine the estimating cost function with machine-hours as the cost driver. b. Use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver. c. For July, the company ran the machines for 4,000 hours and used 4,550,000 kilowatt-hours of power. The overhead costs totaled $365,000. Which cost driver was the best predictor for July? Part B (8%) Corise's Wild Game Company used least squares regression analysis to obtain the following output for the maintenance costs as dependent variable and Machine-hours as an independent variable for the month from February to June : Regression Analysis output: Constant Standard error of Y estimate R2 Number of observations Slope coefficient(s) 17,540 819 0.864 5 2.36 Required: a. Determine the cost function of the maintenance cost. b. What is the expected maintenance cost if the company expects to use 4,000 machine hours in July. c. Briefly explain which quantitative method is more accurate (High-Low method or Regression Analysis method.) d. What is the coefficient of determination from the regression analysis? Comment on the goodness of fit of the maintenance cost function