Kerwin, a large hotel chain, has been using activity-based costing to determine the cost of a McAdams gathers information for weekly inspection costs, rooms inspected, and night's stay at their hotels. inspection labor-hours as follows: (Click the icon to view additional information.) (Click the icon to view the information gathered.) Read the Requirement 1. Explain why number of units inspected and inspection labor-hours are plausible cost drivers of inspection costs. The number of rooms inspected is likely related to supplies used, which is significant component of inspection costs. Inspection labor-hours are a plausible cost driver if labor hours per room inspected, because costs would a function of how much time the inspectors spend on each room. Data table Requirements 1. Explain why rooms inspected and inspection labor-hours are plausible cost drivers of inspection costs. 2. Plot the data and regression line for rooms inspected and inspection costs. Plot the data and regression line for inspection labor-hours and inspection costs. Which cost driver of inspection costs would you choose? Explain. 3. McAdams expects inspectors to inspect 246 rooms and work for 114 hours next week. Using the cost driver you chose in requirement 2, what amount of inspection costs should McAdams budget? Explain any implications of McAdams choosing the cost driver you did not choose in requirement 2 to budget inspection costs. McAdams runs regressions on each of the possible cost drivers and estimates these cost functions: Inspection Costs =$280.79+($6.28 Number of rooms inspected ) Inspection Costs =$610.84+($11.89 Inspection labor-hours )