Redoor Company operates a chain of shops. The company's chief executive officer is interested in accumulating some information on the utility costs incurred by the company. You have been asked to analyze the following twelve months' data.

Month Utility Cost Number of Units

January $5,100 7,500

February $5,300 7,800

March $5,650 8,000

April $6,300 9,200

May $6,400 9,800

June $6,700 10,800

July $ 7,035 11,800

August $7,000 11,200

September $6,200 9,500

October $6,100 9,000

November $5,600 8,500

December $5,900 9,000

Question 1(3 points)

Using the high-low method calculate the variable rate for total utility costs.

Question 2(2 points)

Using the high-low method and variable rate entered above calculate the fixed cost for total utility costs.

Question 3(3 points)

Using the method of least squares, your regression analysis produced an intercept of $1,920 and independent variable of 0.50.

Using the results of the regression analysis calculate the total utility costs for 10,000 units.

Question 4(2 points)

The CEO would like to understand what the advantages and disadvantages of the method of least squares and the high-low method.

Select all of the advantages of the high-low method from the list below.

Question 4 options:

Uses only two data points

Simple to calculate

This method is objective

Excludes outliers automatically

Uses all of the data points