1. High-Low, Scattergraph, and Regression Analysis; Service Company.Hernandez Accounting Company prepares tax returns for individuals. Marie Hernandez, the owner, would like an accurate estimate of the companys costs for planning and decision-making purposes. When Marie asks you to devise a way to estimate costs on a monthly basis, you recall the importance of breaking costs into fixed and variable components. Because the companys costs are driven primarily by the number of tax returns prepared, you decide to use historical data for costs and tax returns prepared:

   Reporting Period (Month)	Total Costs	Returns Prepared
   January	$157,000	315
   February	145,000	300
   March	167,500	375
   April	163,000	325
   May	120,000	250
   June	112,000	210
   July	138,000	280
   August	100,000	190
   September	108,000	205
   October	115,000	245
   November	136,000	265
   December	126,000	255

   You enter these data into a computer regression program and get the following results:

   Coefficients
   y-intercept	24,626
   xvariable	401.86

   Required:
   1. a):Use the four steps of the high-low method to estimate total fixed costs per month and the variable cost per tax return prepared. State your results in the cost equation form Y =f+vX by filling in the dollar amounts forfandv.
   2. b): Use the five steps of the scattergraph method to estimate total fixed costs per month and the variable cost per tax return prepared. State your results in the cost equation form Y =f+vX by filling in the dollar amounts forfandv.
   3. c): Use the regression output given to develop the cost equation Y =f+vX by filling in the dollar amounts forfandv.
   4. d): Use the results of the high-low method (a), scattergraph method (b), and regression analysis (c) to estimate costs for 330 tax returns. (You will have three different answersone for each method.) Which approach do you think is most accurate, and why?
   5. e:)Marielikestheregressionanalysisapproachandasksyoutoestimatecostsfor900taxreturnsusingthisapproach(sheplanstoexpandbyopeninganotherofficeandhiringadditionalemployees).Calculateyourestimate,andexplainwhyyourestimatemightbemisleading.
   6. (I already did a-c, I just need d & e. I got y=30,676.60+364.86x for a, y=60,000+210.526x for b, and y=24,626+401.86x for c.) Thank you.