The controller of the Dorsey Company wants you to estimate a cost function from the following two observations in a general ledger account called Maintenance:

Required
1. Estimate the cost function for maintenance.
2. Can the constant in the cost function be used as an estimate of fixed maintenance cost per month? Explain.
3. How might a manager use the cost functionabove?

Transcribed Image Text:

Month January February Machine-Hours 8,000 12,000 Maintenance Costs Incurred $4,200 5,600