The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The companys cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information:

Quarter	Tons Mined	Direct Labor-Hours			Utilities Cost
Year 1:
First	29,000		6,400		$	64,000
Second	19,000		4,400		$	59,000
Third	34,000		5,400		$	74,000
Fourth	26,000		7,400		$	89,000
Year 2:
First	32,000		12,800		$	132,000
Second	39,000		13,200		$	135,000
Third	44,000		10,800		$	99,000
Fourth	42,000		13,800		$	140,000

Garrison 17e Rechecks 2020-13-10

2-a. Using direct labor-hours as the independent variable, prepare a scattergraph that plots direct labor-hours on the horizontal axis and utilities cost on the vertical axis.

Instructions: 1. On the graph below, use the point tool (Year 1-1st quarter) to plot direct labor-hours on the horizontal axis and utilities cost on the Vertical axis. 2. Repeat the same process for the plotter tools (Year 1-2nd quarter to Year 2-4th quarter). 3. To enter exact coordinates, click on the point and enter the values of x and y. 4. To remove a point from the graph, click on the point and select delete option.

2-b. Using the least-squares regression method, estimate the variable utilities cost per direct labor-hour and the total fixed utilities cost per quarter. Express these estimates in the form Y = a + bX. (Round the Variable cost to 2 decimal places and Fixed Cost to the nearest whole dollar amount.)

2-a. Using direct labor-hours as the independent variable, prepare a scattergraph that plots direct labor-hours on the horizontal axis and utilities cost on the vertical axis. Instructions: 1. On the graph below, use the point tool (Year 1-1st quarter) to plot direct labor-hours on the horizontal axis and utilities cost on the Vertical axis. 2. Repeat the same process for the plotter tools (Year 1-2nd quarter to Year 2-4th quarter). 3. To enter exact coordinates, click on the point and enter the values of x and y. 4. To remove a point from the graph, click on the point and select delete option. Year 1 - 1 quarter $180,000 $ Year 1. 2nd quarter $150,000 Year 1 - 30 quarter $120,000 8 $90,000 Year 1. 4th quartier $60,000 Year 2-15 quarter | $30,000 Year 2. 2nd | quarter $0 3.000 6.000 9,000 12,000 15,000 18.000 Direct Labor-Hours Year 2 - 3 quarter reset 2-b. Using the least-squares regression method, estimate the variable utilities cost per direct labor-hour and the total fixed utilities cost per quarter. Express these estimates in the form Y = a +bX. (Round the Variable cost to 2 decimal places and Fixed Cost to the nearest whole dollar amount.) ) Y= X