Timperly Industries manufactures screens for residential (doors and windows) and commercial (chemical filters) applications. The firm is trying to strengthen its formal budgeting and planning process. It has encountered a problem in budgeting utilities expense. The expense is apparently a mixed cost and varies most directly with machine hours worked. However, management does not know the exact relationship between machine hours and utilities expense. The following data have been gathered from recent operations and may serve as a basis to describe the relationship. Month Machine Hours Utilities Expense January 1,400 $9,000 February 1.700 9,525 March 2,000 10,900 April 1,900 10,719 May 2,300 11,670 June 2,700 13,154 July 2,600 13,200 August 2,200 11,578 Timperly's accountant ran the regression and obtained the following equation: y =$3,900 + $3.45 X. R-square is 0.85. 4 Required: a. Assume that you want to determine quickly whether utilities expense is a mixed cost before using the high and low or least squares regression methods. Briefly describe the method you will use and state how you will determine that the utilities expense is a mixed cost. (4 marks) b. Using the high-low method, estimate utilities expense as a function of machine hours in the form y = a + bx. (7 marks) C. Which method, high-low, or least squares regression, provides a better estimate of the relationship between utilities expense and machine hours? Why? (2 marks) d. Estimate utilities expense using the regression equation, if 2,800 hours are expected next year. (3 marks)