Q1. Eagle plc Eagle plc, the Australian subsidiary of a US packaging company, is preparing its budget for the year to 30th June 20X0. In respect of fuel oil consumption, it is desired to estimate an equation of the form y = a + bx, where y is the total expense at an activity level x, a is the fixed expense and b is the rate of variable cost. The following data relate to the year to 30th June 20XO: Month 34 July 19X8 August September October November December January 1989 February March April Machine hours Fuel oil expense (000s) ($) 640 30 620 34 620 590 42 500 530 500 500 31 530 550 580 48 680 26 26 35 May 43 June The annual total and monthly average figures for 20X0 were as follows: ($) Machine hours Fuel oil expense (000s) 420 6840 570 Annual total Monthly Average 35 You are required to: (a) Estimate fixed and variable elements of fuel oil expense from the above data by both of the following methods: High and low points; Least-squares regression analysis (ii) (b) Compare briefly the methods used in (a) above in relation to the task of estimating fixed and variable elements of a semi-variable cost