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QUESTION ONE Santana Company is a small manufacturer and retailer of guitars. The company produces wooden guitars that are made in-house and sold exclusively

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QUESTION ONE Santana Company is a small manufacturer and retailer of guitars. The company produces wooden guitars that are made in-house and sold exclusively in-store. These guitars were originally hand-made, but over the years, production of guitars has slowly been automated as automation produced guitars with consistent quality. As of 2023, no more wooden guitars were hand-made by Santana Company. Brenda Wellington, the assistant manager, is in the process of working out a cost formula for overhead expenses. She assumes that in some way, overhead expense is related to sales, either in units or in dollars. She has collected data for sales and overhead expenses for January 2022 through December 2023. During her collection of the data for the last two years, she has established that the overhead expenses in February 2022 was exceptionally low as there was an electrical fire that year that caused wide-spread damage. (Data for Question One is on the next page) QUESTION ONE (cont'd) Overhead Sales Sales Date Expense (Units) (Dollars) January-22 23,105 172 $19,990 February-22 14,460 52 $11,260 March-22 24,872 196 $18,940 April-22 24,684 202 $21,340 May-22 32,384 273 $32,100 June-22 28,945 245 $28,500 July-22 26,758 226 $22,650 August-22 32,394 290 $34,350 September-22 24,254 152 $20,365 October-22 25,763 239 $25,320 November-22 32,445 251 $30,040 December-22 45,476 342 $43,090 January-23 22,103 148 $18,950 February-23 30,105 237 $27,030 March-23 36,874 305 $40,010 April-23 27,784 221 $29,450 May-23 23,345 172 $24,150 June-23 29,312 234 $26,940 July-23 28,193 208 $21,880 August-23 28,473 214 $21,540 September-23 25,653 193 $24,675 October-23 23,849 178 $26,910 November-23 24,976 200 $21,890 December-23 43,364 326 $34,330

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