Maria Chavez owns a catering company that serves food and beverages at parties and business functions. Chavezs business is seasonal, with a heavy schedule during the summer months and holidays and a lighter schedule at other times.

One of the major events Chavezs customers request is a cocktail party. She offers a standard cocktail party and has estimated the cost per guest as follows:

Food and beverages	$	18.00
Labor (0.5 hour @ $9.80/hr.)		4.90
Overhead (0.5 hour @ $18.68/hr.)		9.34
Total cost per guest	$	32.24

The standard cocktail party lasts three hours and Chavez hires one worker for every six guests, so that works out to one-half hour of labor per guest. These workers are hired only as needed and are paid only for the hours they actually work.

When bidding on cocktail parties, Chavez adds a 15% markup to yield a price of about $36 per guest. She is confident about her estimates of the costs of food and beverages and labor but is not as comfortable with the estimate of overhead cost. The $18.68 overhead cost per labor-hour was determined by dividing total overhead expenses for the last 12 months by total labor-hours for the same period. Monthly data concerning overhead costs and laborhours follow:

Month	Labor Hours	Overhead Expenses
January	3,700	$	57,000
February	2,300		61,000
March	2,500		62,000
April	3,700		66,000
May	4,000		69,000
June	5,000		73,000
July	6,000		76,000
August	7,000		79,000
September	6,500		77,000
October	4,000		70,000
November	3,600		66,000
December	6,000		74,000
Total	54,300	$	830,000

Chavez has received a request to bid on a 180-guest fund-raising cocktail party to be given next month by an important local charity. (The party would last the usual three hours.) She would like to win this contract because the guest list for this charity event includes many prominent individuals that she would like to land as future clients. Maria is confident that these potential customers would be favorably impressed by her companys services at the charity event.

Required:

2(a).	Use the least-squares regression method to estimate the fixed and variable components of overhead expenses. (Round the Variable cost to 2 decimal places, and Fixed Cost to the nearest dollar.)
	Fixed Cost______ Variable cost per hour_______

2(b).	Express these estimates in the form Y = a + bX. (Round the Variable cost to 2 decimal places, and Fixed Cost to the nearest dollar.)
	Y=_____+______X

3.	Estimate the contribution to profit of a standard 180-guest cocktail party if Chavez charges her usual price of $36 per guest. (In other words, by how much would her overall profit increase?) (Round your intermediate calculations and final answer to 2 decimal places.)
	Sales:6,480.00 Variable cost:____

4.	How low could Chavez bid for the charity event in terms of a price per guest and still not lose money on the event itself? (Round your answer to the nearest dollar.)
	Bid Price:____