Part 3: Kendrick Anderson Furniture Maker, LLC creates custom tables in Atlanta. Assume that the following represents monthly information on production volume and manufacturing costs since the company started operations Living Room Dining Room Costs Produced Total Manufacturing Total Tables Tables Produced Tables Produced Are Yeart 30 115 52 110 30 130 95 70 12 106 110 100 81 2.700 44 81 ST1000 57 500 78.724 37.300 30.000 70.130 400 57,400 105.700 74,750 74200 68.500 19. 72.000 71.700 74200 54.900 August September November December January Year 2 Fy Wh Apr May June Sector October November December 56 40 105 100 8 12 115 100 85 110 120 120 01 39 00 54 Required a. Use the high-low method to develop a cost-estimating equation for total manufacturing costs. Interpret the meaning of the "fixed" costs and comment on the results. b. Use the chart feature of a spreadsheet to develop a scatter graph of total manufacturing costs and total units produced. Use the graph to identify any unusual observations. c. Excluding any unusual observations, use the high-low method to develop a cost-estimating equation for total manufacturing costs. Comment on the results, comparing them with the results in requirement (a). d. Use simple regression analysis to develop a cost- estimating equation for total manufacturing costs. What advantages does simple regression analysis have in comparison with the high-low method of cost estimation? Why must analysts carefully evaluate the data used in simple regression analysis? e. A customer has offered to purchase 50 dining room tables for $452 per table. Management has asked your advice regarding the desirability of accepting the offer. What advice do you have for management? Additional analysis is required Part 3: Kendrick Anderson Furniture Maker, LLC creates custom tables in Atlanta. Assume that the following represents monthly information on production volume and manufacturing costs since the company started operations Living Room Dining Room Costs Produced Total Manufacturing Total Tables Tables Produced Tables Produced Are Yeart 30 115 52 110 30 130 95 70 12 106 110 100 81 2.700 44 81 ST1000 57 500 78.724 37.300 30.000 70.130 400 57,400 105.700 74,750 74200 68.500 19. 72.000 71.700 74200 54.900 August September November December January Year 2 Fy Wh Apr May June Sector October November December 56 40 105 100 8 12 115 100 85 110 120 120 01 39 00 54 Required a. Use the high-low method to develop a cost-estimating equation for total manufacturing costs. Interpret the meaning of the "fixed" costs and comment on the results. b. Use the chart feature of a spreadsheet to develop a scatter graph of total manufacturing costs and total units produced. Use the graph to identify any unusual observations. c. Excluding any unusual observations, use the high-low method to develop a cost-estimating equation for total manufacturing costs. Comment on the results, comparing them with the results in requirement (a). d. Use simple regression analysis to develop a cost- estimating equation for total manufacturing costs. What advantages does simple regression analysis have in comparison with the high-low method of cost estimation? Why must analysts carefully evaluate the data used in simple regression analysis? e. A customer has offered to purchase 50 dining room tables for $452 per table. Management has asked your advice regarding the desirability of accepting the offer. What advice do you have for management? Additional analysis is required