Nathan Gibbon, financial analyst atCorporation, is examining the behavior of quarterly utility costs for budgeting purposes.

Quarter. Machine-Hours. Utility Costs

Quarter 1. 95,000 $255,000

Quarter 2 50,000 190,000

Quarter 3. 85,000 240,000

Quarter 4. 100,000 300,000

Quarter 5. 65,000 210,000

Quarter 6 90,000 280,000

Quarter 7 80,000 265,000

Quarter 8 75,000 235,000

1.Estimate the cost function for the quarterly data using thehigh-low method.

2. Plot and comment on the estimated cost function.

3.Gibbon anticipates that LMN will operate machines for 100,000 hours in quarter 9. Calculate the predicted utility costs in quarter 9 using the cost function estimated in requirement 1.