Marthas Vineyard Marine Supply is a wholesaler for a large variety of boating and fishing equipment. The companys controller, Mathew Knight, has recently completed a cost study of the firms material-handling department. Knight used work measurement to quantify the departments activity. The control factor unit used in the work-measurement study was hundreds of pounds of equipment unloaded or loaded at the companys loading dock. Knight compiled the following data.

1. Construct an Excel spreadsheet and use the Excel commands to perform a least-squares regression. Estimate the variable- and fixed-cost components in the companys material-handling department costs. Note: Round the Variable-cost component to 2 decimal places and the Fixed-cost component to the nearest whole dollar amount.

Fixed-cost component = Variable-cost component =

2. Complete the least-squares regression equation for the departments costs. Note: Round variable cost per unit to 2 decimal places and other answer to the nearest whole dollar amount.

total monthly cost = _______ + _______ per unit of activity

3. Predict the firms material-handling departments costs for a month when 2,200 units of activity are recorded. Note: Round variable cost per unit to 2 decimal places and final answer to the nearest whole dollar amount.

total monthly cost =

4. Which cost method do you recommend? multiple choice The visual fit method. The high-low method. The least squares regression method.