10-31 This is ONE question. Please read and answer ALL parts of the question. Click on the photo(s) to view the full photo(s) if you have to. DO NOT answer if you will only answer one part of the problem. Please show your work and type your answer out if possible. PLEASE HIGHLIGHT YOUR ANSWERS. Please check your work again to see if it's correct. I will give you a high rating and comment. Thank you so much.

10-31 Regression analysis, service company. (CMA, adapted) Linda Olson owns a professional char- acter business in a large metropolitan area. She hires local college students to play these characters at children's parties and other events. Linda provides balloons, cupcakes, and punch. For a standard party the cost on a per-person basis is as follows: Balloons, cupcakes, and punch Labor (0.25 hour X $20 per hour) Overhead (0.25 hour x $40 per hour) Total cost per person $ 7 5 10 $22 ||| Linda is quite certain about the estimates of the materials and labor costs, but is not as comfortable with the overhead estimate. The overhead estimate was based on the actual data for the past 9 months, which ASSIGNMENT MATERIAL 435 are presented here. These data indicate that overhead costs vary with the direct labor-hours used. The $40 estimate was determined by dividing total overhead costs for the 9 months by total labor-hours. Month April May June July August September October November December Total Labor-Hours 1,400 1,800 2,100 2,200 1,650 1,725 1,500 1,200 1,900 15,475 Overhead Costs $ 65,000 71,000 73,000 76,000 67,000 68,000 66,500 60,000 72,500 $619,000 Linda has recently become aware of regression analysis. She estimated the following regression equation with overhead costs as the dependent variable and labor-hours as the independent variable: y = $43,563 + $14.66X Required 1. Plot the relationship between overhead costs and labor-hours. Draw the regression line and evaluate it using the criteria of economic plausibility, goodness of fit, and slope of the regression line. 2. Using data from the regression analysis, what is the variable cost per person for a standard party? 3. Linda Olson has been asked to prepare a bid for a 20-child birthday party to be given next month. Deter- mine the minimum bid price that Linda would be willing to submit to recoup variable costs