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Question 1 (12 minutes, 6 marks) Serenity Living sells gas fireplaces for home use. Serenity delivers each gas fireplace at no charge to the customer.

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Question 1 (12 minutes, 6 marks) Serenity Living sells gas fireplaces for home use. Serenity delivers each gas fireplace at no charge to the customer. In January 2020 the company plans to sell 145 fireplaces. Serenity's delivery costs for the year 2019 are as follows: January February March April May June July August September October November December TOTAL Delivery costs Units sold $ 9,900 120 $ 7,600 90 $ 10,300 125 $ 7,700 90 $ 17,250 215 $ 11,100 135 $ 6,700 75 $ 14,700 180 $ 7,250 85 $ 15,950 195 $ 8,750 105 $ 15,100 185 $ 132,300 1,600 REQUIRED: a) Use the least squares method to determine a cost formula for the delivery costs (2 marks) b) Use the high-low method to determine a cost formula for the delivery costs and estimate the delivery costs for January 2020 (4 marks)

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