Super Computer Co$.$ provided the following summary regression results for Maintenance

Costs:

Number of Set$-$ups: Coefficient Standard Error t$-$Value

Intercept $$36,939\mathrm{.}77$ $$56,504\mathrm{.}880\mathrm{.}65$

Slope coefficient $ $361\mathrm{.}91$ $$152\mathrm{.}932\mathrm{.}37$

R

$2=0\mathrm{.}36$; Estimated use $=54$ set$-$ups

Number of Machine Hours: Coefficient Standard Error t$-$Value

Intercept $$30,654\mathrm{.}86$ $$23,569\mathrm{.}510\mathrm{.}16$

Slope coefficient $ $56\mathrm{.}76$ $$7\mathrm{.}827\mathrm{.}25$

R

$2=0\mathrm{.}84$; Estimated use $=1,600$ machine hours

Currently Maintenance Costs are estimated using the High $$ Low method based on Direct Labor Hours

using the following data:

Direct Labor hours Maintenance Costs

Highest observation of cost driver $2,500$ $$300,000$

Lowest observation of cost driver $1,500$ $$220,000$

a$.$ Using the High$-$Low method, what is the estimate of the Maintenance Costs when $1,300$ Direct Labor

hours are used?

b$.$ Based on the regression information above indicate which cost driver $($Set$-$ups or Machine Hours$)$ is

the better cost driver? Why is this cost driver best?

c$.$ Using the regression information above and the cost driver from b$.$ estimate Maintenance Costs for

the coming year.

d$.$ Which of your estimates $($a$.$ or c$.)$ is the more accurate estimate of Maintenance Costs? Why?