Part II Michael White is the owner of \"LPNKN\" company which specializes in catering. Among the service provide are outdoor parties and banquets for wedding and other functions. His business is protable in die spring and summer months. During seasonal periods there are extra costs, however; even during nonpeak periods. Michael must work to cover incurred expenses. One of the major event Michael's customer requests is a wedding party. He offered a standard wedding party and has developed the following cost structure on a perperson basis. Fruit and mm sum Merle II. a 511 per turn use Most! {.Btl. em Durham -........._ _ 5.10 Toelmatwm ___ _. _m When bidding on weddings. Michael adds a 15 percent markup to this cost structure as a profit margin. Michael is quite certain about his estimates of the food and beverage and labor costs but is not as comfortable with the overhead estimate. This estimate was based on the actual data for the past 12 months presented in the following table. These data indicate that overhead expenses appear to vary with the directlabor hours expended. The $14 per hour overhead estilnate was determined by dividing total overhead expended for the 12 months by total labor hours and rounding to the nearest dollar. lad-ulna Whenl 2.5m ... 5M 3m] ..... mm} 1-533 ..... WM 4.2m ..... 61m 6513 ..... HM 5.5m ..... TIM rm: ..... rsnm TED "M LEI] ..... Em 3.1!] ..... . m 5.901 - ..._....__..... Hm Required: 1. Use the High Low method to estimate the fixed and variable cost components of overhead. Express this estimate in the form Y: a + bk: 2. Use the linear regression approach to estimate die fixed and variable cost components ofoverhead. Express this estimate in the form '1': a + bX 3. Mich of the three approaches {that is. the $14 per hour. hi-low, or regression) to estimating overhead cost would you recommend to Michael and why? 4. Michael has been asked to prepare a bid for a ESQ-person cocktail party to be given next month. Determine the minimum bid price that Michael should be willing to submit. 5. What other factors do you think Michael should consider in developing the bid price for the cocktail party