Nathan Davidson, financial analyst at LMN Corporation, is examining the behavior of quarterly utility costs for budgeting purposes. Davidson collects the following dataon machine-hours worked and utility costs for the past 8 quarters:(Click the icon to view the data.)Read the requirements.Requirement 1. Estimate the cost function for the quarterly data using the high-low method. (Complete all answer boxes.)Data table+QuarterMachine-HoursUtility CostsQuarter 1100,000 $265,000Quarter 255,000200,000Quarter 390,000250,000Quarter 4105,000280,000Quarter 570,000220,000Quarter 695,000260,000Quarter 785,000275,000Quarter 880,000245,000PrintDone-☑Requirements1. Estimate the cost function for the quarterly data using the high-low method.2. Plot and comment on the estimated cost function.3. Davidson anticipates that LMN will operate machines for 105,000 hours inquarter 9. Calculate the predicted utility costs in quarter 9 using the costfunction estimated in requirement 1.PrintDone✓

The high-low method, as the name indicates, uses two extreme data points to determine the values of…

Answered: Nathan Davidson, financial analyst at…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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