Sebolt Wire Company heats copper ingots to very high temperatures by placing the ingots in a large heat coil. The heated ingots are then run through a shaping machine that shapes the soft ingot into wire. Due to the long heat-up time, the coil is never turned off. When an ingot is placed in the coil, the temperature is raised to an even higher level, and then the coil is allowed to drop to the €œwaiting€ temperature between ingots. Management needs to know the variable cost of power involved in heating an ingot and the fixed cost of power during €œwaiting€ periods. The following data on ingots processed and power costs are available:

Required:
1. Using the high-low method, estimate a cost formula for power cost. Express the formula in the form Y = a + bX.
2. Prepare a scattergraph by plotting ingots processed and power cost on a graph. Fit a straight line to the plotted points using a ruler, and estimate a cost formula for power cost using the quick-and dirtymethod.

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Month Ingots Power Cost 1 January Februaryrt 110 90 80 $5,500 $4.500 $4,400 100 5,000 6,000 120 $5,600 70 S4,000 60 $3,200 $3,400 40 $2,400 April May June 130 July August. September .. October 50