Chapter 6-Problem 2 WD Inc. is developing a regression cost equation for the indirect costs in its plant. WD manufactures windows and doors used in home construction; both products are made in standard and custom sizes. Occasionally, a very large order substantially increases the direct and indirect costs in a given month. The indirect costs primarily consist of supplies, quality control and testing, overtime, and other indireet labor. Regression is used to budget indirect costs for the coming year, primarily for cash management purposes. The management accountant knows from prior years that both direct labor hours and machine hours in the plant are good independent variables for estimating indirect costs. Date Total Indirect Machine Hours Direct Labor Hours Costs $274,500 320,000 323,200 219,900 26,940 35,690 2,009 3,057 Jun-18 July August September October November December 32,580 3,523 24,580 1,856 19,950 34,330 232,100 342,300 2,168 3,056 43,180 3,848 427,800 Jan-19 February March April May 21,290 28,430 24,660 231,000 257,300 248,700 248,400 338,400 1,999 2,290 1,894 27,870 2,134 31,940 3,145 Question: wD has received a custom order that would cause Direct Labor hours to be 45,000 hours and Machine hours to be 4200 hours next month. They have budgeted a maximum cash flow of $400,000 for the month. Should they accept the custom order? Explain your