Angie March owns a catering company that stages banquets and parties for both individuals and companies.

The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angie has gathered the following cost information from the past year:

Required
a. Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month.
b. Angie has booked 3,200 labor hours for the coming month. How much overhead should she expect to incur?
c. If Angie books one more catering job for the month, requiring 200 labor hours, how much additional overhead should she expect to incur?
d. Angie recently attended a meeting of the local Chamber of Commerce, at which she heard an accounting professor discuss regression analysis and its business applications.

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Month Labor Hours 3,500 2,800 3,000 4,200 4,500 5,500 6,500 7,500 7,800 4,500 3,100 6,500 59,400 Overhead Costs January February March April May June July August September October November $62,000 59,000 60,000 64,000 67,000 71,000 74,000 77,000 80,000 68,000 62,000 73,000 $817,000 Total