- Production in Units Overhead Costs Quarter 1/06 77 $ 723 2/06 717 3/06 652 137 4/06 1/07 2/07 126 1,133 1,003 1,113 129 3/07 126 1,121 4/07 134 1,044 1,002 1/08 125 2/08 130 1,068 3/08 116 998 4/08 85 959 1/09 85 837 123 2/09 3/09 1,052 993 On November 15, 2017. a recent VT graduate newly hired as cost analyst at Fitzgerald Company was asked to predict Overhead costs for the company's operations in 2018 when 520 units are expected to be produced. The VT graduate inen mulle methods for measuring costs and decided to try a couple First the following userty data was collected Click then to view the quarterly data) Requirements 1. Using the high-low method to estimate costs, prepare a prediction of overhead coses for 2018 2. Sandy ronarogression is using the tashe colected. The rouw: Y-3332 $5.77X Using this cool function, predict overhead costs for 2018 3. Which prediction do you prefer? Why? Requirement 1. Using the h ow method to estimate costs, prepare a prediction of overhead costo 2010 Begin by estimating the cost function for a quarter year using the high-low method. (Enter the quarterly feed cost rounded to two decimal places and the variable cost rounded to four decimal places Round your answer to two decals) Using the high-low method, the predicted overhead costs for 2018 is $ Requirement 2. Neat the analyseran a regression analysis using the collected data. The result was: Y 5332 55.77X. Using this cost function, predict overhead costs for 2018. (Round your answer to two decimal places.) The predicted overhead costs for 2018 5 Requirement 3. Which prediction do you prefer? Why? The l ves better cost estimate because we data from a cost function. The data used by the may not be representative of the general relation between costs and volume