Restaurant Angela is a catering company that serves food and beverages at parties and business functions.

Restaurant offers a standard cocktail party has estimated the cost per guest as follows:

Food & Beverage$16Labour ( 0.5 hour @$9.80/hour )$4.90Overhead (0.5 hour @$18.54/hour)$9.27Total cost per guest$30.17

The standard cocktail party lasts three hours and Angela hires one worker for every six guests, so that works out to one and a half-hour of labour per guest. These workers are hired only as needed and are paid only for the hours they actually work.

When bidding on cocktail parties, Angela adds a 14% mark-up to yield a price of about $32.00 per guest. She is confident about the estimates of the costs of food and beverages and labour but is not as comfortable with the estimate of overhead cost. The $18,54 overhead cost per labour hour was determines by providing total overhead expenses for the last 12 months by total labour-hour for the same period.

Monthly data concerning overhead costs and labour hours is as below: