Sahana is the new manager of a warehouse for Footwear manufacturing in Wollongong. She has been asked to estimate future monthly purchase costs for material no. 344 used in the factory. Sahanas purchase and quantity data for the past nine months are as follows:

Month	Cost of purchase	Quantity purchased
January	$12 675	2 710 metres
February	13 000	2 810
March	17 653	4 153
April	15 825	3 756
May	13 125	2 912
June	13 814	3 387
July	15 300	3 622
August	10 233	2 298
September	14 950	3 562

Estimated monthly purchases for this material, based on expected demand of products for the rest of the year, are:

Month	Purchase quantity expected
October	3 340 metres
November	3 710 metres
December	3 040 metres

Required
a) The computer in Sahanas office is down, so you are asked to help her to prepare a cost function to estimate the future purchase cost for material no. 344 using the highlow method.	15 marks
b) Using the equation from requirement 1, calculate the future expected purchase costs for each of the last three months of the year.	10 marks
c) After a few hours the computer is fixed and you can use it to determine the cost function using regression method to estimate future purchase cost for material 344 and obtain the cost function: y = $2 582.57 + 3.54X. Using the regression results, calculate the expected purchase costs for October, November and December. Compare the expected purchase costs with the expected purchase costs calculated using the highlow method in requirement b. Comment on your results

Sahana is the new manager of a warehouse for Footwear manufacturing in Wollongong. She has been asked to estimate future monthly purchase costs for material no. 344 used in the factory. Sahana's purchase and quantity data for the past nine months are as follows: Month Cost of purchase Quantity purchased January $12 675 2710 metres February 13 000 2 810 March 17 653 4 153 April 15 825 3 756 May 13 125 2 912 June 13 814 3 387 July 15 300 3 622 August 10 233 2 298 September 14 950 3 562 Estimated monthly purchases for this material, based on expected demand of products for the rest of the year, are: Month Purchase quantity expected October 3 340 metres November 3 710 metres December 3 040 metres Required a) The computer in Sahana's office is down, so you are asked to help her to 15 marks prepare a cost function to estimate the future purchase cost for material no. 344 using the high-low method. b) Using the equation from requirement 1, calculate the future expected 10 marks purchase costs for each of the last three months of the year. c) After a few hours the computer is fixed and you can use it to determine 25 marks the cost function using regression method to estimate future purchase cost for material 344 and obtain the cost function: y = $2 582.57 + 3.54x. Using the regression results, calculate the expected purchase costs for October, November and December. Compare the expected purchase costs with the expected purchase costs calculated using the high-low method in requirement b. Comment on your results