Please assist with questions a-e

Problem 2-28A Estimating fixed and variable cost using the regression method Dean and Powell Tax Services Company has 31 branch offices in the nation. Each office has about three to six professional accountants and one to two secretaries. In a busy season, the office manager, who is also a professional accountant, can hire temporary employees for support work such as docu- ment filing and typing. Norman Dean, the president, is wondering whether he should expand his busi- ness by opening more offices. One of the factors that he is considering is how to estimate office support costs. Andrea Jones, the accountant, collected the following cost data for all 31 offices. CH b. FC Professional Hours Support Costs Professional Hours Branch Support Costs Branch A1 225 $4,241 3,435 6,398 6,502 4,140 3,368 3,820 165 358 471 492 328 146 359 275 364 6,396 $3,856 5,936 8,615 9,639 5,968 7,115 3,287 7,515 7,374 5,376 5,784 5,426 4,418 4,506 6,488 394 386 279 3,946 8,189 4,506 6,744 251 314 264 4,645 283 198 226 341 6,073 6,290 338 437 9,113 Required a. The company uses the number of professional hours as the cost driver for office support costs. Use an algebraic equation to describe how total office support costs can be estimated. b. Use a spreadsheet program to perform a regression analysis. Use office support costs as the depen- dent variable (Y) and the professional hours as the independent variable (X). Determine the total fixed cost per office and variable cost per professional hour. c. Identify the R statistic provided by the Excel program and explain what it means. d. Mr. Dean plans to open a new branch office in a Dallas suburb. He expects that the monthly profes- sional hours will be 3,000. Estimate the total office support cost for Mr. Dean. What portion of the total cost is fixed and what portion is variable? Explain how multiple regression analysis could be used to improve the accuracy of the cost estimates