III. Northern Province Hospital of British Columbia has just hired a new chief administrator who is anxious 10 employ sound management and planning techniques in the business affairs of the hospital. Accordingly, she has directed her assistant to summarize the cost structure of the various departments so that data will be available for planning purposes. The assistant is unsure how to classify the utilities costs in the Radiology Department since these costs do not exhibit either strictly variable or fixed cost behavior. Utilities costs are very high in the department due to a CAT scanner that draws a large amount of power and that is kept running at all times. The scanner can't be turned off due to the long warm-up period required for its use. When the scanner is used to scan a patient, it consumes an additional burst of power. The assistant has accumulated the following data on utilities costs and use of the scanner since the first of the year January ------ Number Utilities Month of Scans Cast 60 $2,640 February 70 $3,120 March.... 90 $3,480 April.. 120 $3,960 May 100 $3,600 June 130 $4,320 July $4,800 August... 140 $4,320 September $3,720 October ...... 80 $3,000 150 110 The chief administrator has informed her assistant that the utilities cost is probably a mixed cost that will have to be broken down into its variable and fixed cost elements by use of a scattergraph, The assistant feels, however, that if an analysis of this type is necessary, then the high-low method should be used, since it is easier and quicker The controller has suggested that there may be a better approach Required: 1. Using the high-low method, estimate a cost formula for utilities. Express the formula in the form Ya+bX. (The variable rate should be stated in terms of cost per scan.) 2. Prepare a scattergraph by using the data above (The number of scans should be placed on the horizontal axis, and utilities cost should be placed on the vertical axis.). Using the least squares regression method. estimate a cost formula for utilities