Ken Howard, financial analyst at ABC Corporation, is examining the behavior of quarterly maintenance costs for budgeting purposes. Howard collects the following data on machine-hours worked and maintenance costs for the past 12 quarters Requirement 1. Estimate the cost function for the quarterly data using the high-low method. (Complete all answer boxes.) Data table y (After you hill continue, the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 2. Plot and comment on the estimated cost function. Quarter Machine-Hours Maintenance Costs 70,000 185.000 2 90,000 220,000 3 80,000 200,000 Piot the ine for the estimated cost function using the high-low method. The data points for the 12 quarters have already been entered in for you. (Use the line tool button displayed below to draw the graph.) 4 100,000 240,000 5 65.000 170,000 8 85,000 215,000 7 G 75,000 195,000 8 95,000 235,000 9 75,000 190,000 10 95,000 225,000 11 85,000 180,000 12 115,000 260,000 50.0075 00000035,000.0075,000 Mader-Hous Click to enlarge graphi Comment on the estimated cost function by choosing the correct statement to go with each of the evaluation criteria listed below. Economic plausibility O The cost function shows a negative economically plausible relationship between machine-hours and maintenance costs. There is not a clear-cut engineering relationship of higher machine-hours and m O The cost function shows a positive economically plausible relationship between machine-hours and maintenance costs. There is a clear cut engineering relationship of higher machine-hours and maintenance costs. Goodness of t O The Nigh-low line appears to not "f" the data wel. The vertical differences between the actual and predicted costs appear to be quite large. O The high-low line appears to "f" the data woll. The vertical differences between the actual and predicted costs appear to be quite small. Slope of high-low line: Print Done Next 50,000,0000 08a5.00500075.000 Machine Hours G Click to enlarge graph Comment on the estimated cost function by choosing the correct statement to go with each of the evaluation criteria listed below. Economic plausibility: O The cost function shows a negative economically plausible relationship between machine-hours and maintenance costs. There is not a clear-cut engineering relationship of higher machine-hours and m O The cost function shows a positive economically plausible relationship between machine-hours and maintenance costs. There is a clear-cut engineering relationship of higher machine-hours and mainte Goodness of fit: O The high-low Ine appears to not "T" the data wall. The vertical differences between the actual and predicted costs appear to be quite large. O The high-low line appears to "fr" the data well. The vertical differences between the actual and predicted costs appear to be quite small Slope of high-low line O The slope of the line appears to be unreasonably steep indicating that, on average, maintenance costs in a quarter do not vary with machine-hours used. O The slope of the Ine appears to be reasonably steep indicating that, on average, maintenance costs in a quarter vary with machine-hours used. Requirement 3. Howard anticipates that ABC will operate machines for 70,000 hours in quarter 13. Calculate the predicted maintenance costs in quarter 13 using the cost function estimated in requirement 1. The predicted maintenance costs would be $ for quarter 13. Mackloce Pro Search or type URL Quartar Machine-Hours Maintenance Cos 70.000 $ 185.000 2 90.000 220,000 3 80,000 200,000 4 100,000 240,000 5 65,000 170.000 6 85,000 215.000 7 75.000 195.000 B 95.000 235.000 9 75,000 190,000 10 95,000 225,000 11 85,000 180.000 12 115.000 260,000 Print Done Next