if possible using an excel document. showing work would be beneficial to my learning as this has me stumped.

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

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

c. Use a regression program to compute regression coefficients to describe the overhead cost equation (show the cost function)

d. Use the results of your regression analysis to develop an estimate of overhead costs assuming 196,000 machine-hours will be worked next week.

e. Explain in one paragraph if Machine-Hours are a good way to estimate Overhead Costs. (Include at least ONE statistical reason to justify your answer).

USING THE INFORMATION GIVEN IN THE IMAGE

RAB Company manufactures engines. Plant management has experienced fluctuating monthly overhead costs and wants to estimate overhead costs accurately to plan its operation and its financial needs. Interviews with plant personnel and studies reported in trade publications suggest that overhead in this industry tends to vary with machine-hours. A 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 machine-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