1. Complete the answer sheet below by placing an "X" under each heading that identifies the cost involved. You should have two "Xs" for each cost (each row) - one identifying Cost Behavior (Variable or Fixed) and one indicating either Direct Materials, Direct Labor, Manufacturing Overhead, OR Pe- riod Cost. (5 Points) Period Cost ufactur- ing Over- head (Selling or Administra- Variable Direct Direct Materials Labor tive) Cost Fixed Cost Materials costs traceable to cost objects Production Super- visor's Salary Production line workers' wages Factory Building depreciation Advertising costs -1 - 2. Maintenance costs at a Gibson Corporation factory are listed below: ETT Machine-Hours Maintenance Cost 3,135 3,095 3,133 3,157 3,065 3,076 3,084 3,125 3,098 March. April May June July. August September ... October.. November. $48,340 $47,993 $48,345 $48,548 $47,733 $47,830 $47,880 $48,247 $48,014 Management believes that maintenance cost is a mixed cost that depends on machine-hours. a. Using Excel, prepare a seattergraph of the above data. Print and attach a copy of the graph. Comment on the strength of the relationship. Does it appear that machine hours is a good predictor of maintenance cost? (1 points) b. Using the high/low method, write an equation to estimate total maintenance cost for any level of machine hours. (2 points) Days hign: 3157 Cost 48548 47733 low: With the above equation, what is the expected maintenance cost if it is estimated that 3,141 machine hours will be used in December? c. Using Excel, run a simple regression on the data provided. Print and attach a copy of the summary output. Write an estimating equation using the regression results. (2 points) Using the regression equation, what is the expected maintenance cost if it is estimated that 3,141 machine hours will be used in December? What causes the difference between the results of high/low and regression? Which method is more accu- rate? Explain why. -2