Information: Your company is preparing an estimate of its production costs for the coming period. The controller estimates that direct materials costs are $50 per unit and that direct labor costs are $24 per hour. Estimating overhead, which is applied on the basis of direct labor costs, is difficult. The controller's office estimated overhead costs at $4,100 for fixed costs and $18 per unit for variable costs. Your colleague, Lance, who graduated from a rival school, has already done the analysis and reports the "correct" cost equation as follows: Overhead = $10,855 +$15.82 per unit variation in overhead explained by the equation, it certainly should be adopted as the best basis for estimating costs." When asked for the data used to generate the regression, Lance produces the following: Month Notino 00099 Overhead $57,556 60,781 77,273 56,594 81,800 72,347 63,969 73,547 77,612 60,247 61,528 73,884 73,316 Unit Production 3,080 3,290 4,220 3,050 3,450 3,960 3,380 4,060 4,170 3,240 3,410 4,130 3,930 The company controller is somewhat surprised that the cost estimates are so different. You have therefore been assigned to check Lance's equation. You accept the assignment with glee