Chapter 6-Problem 1 VF Company manufactures ornate frames for original artwork. The company began operations in January. The owner has asked you to help her understand the nature of the cost behavior in hopes of helping better price the frames. Below are the costs per month associated with production since January: Number of Frames Total Cost 1,600 7,200 3,920 1,200 3,200 2,600 2,200 3,600 4,560 5,880 6,560 Month January February March $42,000 $65,000 $59,000 $37,200 April May $58,000 June $54,000 $51,200 $62,000 $64,000 $63,000 S64,000 $33,000 July August September October November December 800 Questions: Determine the cost estimation model using the high-low method Estimate the Total Cost for next month assuming production of 5,500 frames using the costestimation model from (1) Determine the cost estimation model using the method of least squares/regression analysis Estimate the Total Cost for next month assuming production of 5,500 using the cost estimation model/regression analysis from (3) Determine the coefficient of determination/R2. What does this measure tell you about the cost estimation model from (3) 1 2. 3. 4 5