High-low method Ken Howard, financial analyst at KMW Corporation, is examining the behavior of quarterly maintenance costs for budgeting purposes. Howard collects the following data on machine-hours worked and maintenance costs for the past 12 quarters:

Required1. Estimate the cost function for the quarterly data using the high-low method.2. Plot and comment on the estimated cost function.3. Howard anticipates that KMW will operate machines for 100,000 hours in quarter 13. Calculate the predicted maintenance costs in quarter 13 using the cost function estimated in requirement1.

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Quarter Machine-Hours Maintenance Costs 100,000 120,000 110,000 130,000 95,000 115,000 105,000 $205,000 2 240,000 220,000 260,000 190,000 4 235,000 215,000 255,000 210,000 245,000 200,000 280,000 125,000 105,000 125,000 115,000 140,000 10 11 12