Question Three

Nyaweco Engineering Ltd has revealed that their maintenance cost incurred, and the actual machine hours worked during January, February, March, and April 2023 were as follows:

Month	Machine hours in production departments	Maintenance departments Cost in Kshs
January	800	350
February	1200	350
March	400	150
April	1600	550

Required:

a) Find the cost estimation function using:

(i) High-low method

(ii) Regression analysis

b) Using the regression function above, estimate:

(i)The maintenance costs that would have been incurred if the machine hours were expected to be 900 in the month of May 2023.

(ii)The maximum machine hours that would have been worked If the maintenance cost incurred had been limited to Kes 400,000 for the month of May 2023

c) Assuming that in May 2023 machine hours were 900, show a 95% confidence interval for this point estimate

(Assume tc = 2.7764 and se = 63.25)