Clough Company Is Interested in Establishing the Relationship Between Utility

question 56

Essay

Clough Company is interested in establishing the relationship between utility costs and machine hours.Data have been collected and a regression analysis prepared using Excel.The monthly data and the regression output follow:
$\begin{array}{|l|r|r|}\hline \text { Month } & \text { Machine } & \text { Electricity } \\& \text { Hours } & \text { Costs } \\\hline \text { January } & 3,250 & 22,080 \\\hline \text { February } & 3,770 & 25,200 \\\hline \text { March } & 2,470 & 16,200 \\\hline \text { April } & 4,030 & 27,600 \\\hline \text { May } & 4,940 & 33,900 \\\hline \text { June } & 4,290 & 26,400 \\\hline \text { July } & 5,330 & 29,700 \\\hline \text { August } & 4,560 & 27,300 \\\hline \text { September } & 2,600 & 18,600 \\\hline \text { October } & 4,810 & 31,200 \\\hline \text { Nowember } & 6,110 & 37,200 \\\hline \text { December } & 5,460 & 33,300 \\\hline\end{array}$

Required:
(a. )What is the equation for utility costs using the high-low method?
(b. )Prepare an estimate of utility costs for a month when 3,000 machine hours are worked.

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Definitions:

Formalin

An aqueous solution of formaldehyde gas; commonly used as a disinfectant or preservative in medical laboratories.

Biopsy

Excision of a small piece of tissue for microscopic examination.

Tissue Specimens

Samples of bodily tissues collected for medical examination and analysis.

Catgut

A type of cord made from the natural fibers of an animal's intestines, traditionally used as material for surgical sutures.