EX $6-34($Algo$)$ Estimating Cost Behavior by Multiple Methods $($Appendix$)($LO $6-1,6-2,6-5,6-9)$

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Gator Beach Marts, a chain of convenience grocery stores in the Fort Lauderdale area, has store hours that fluctuate from month to month as the tourist trade in the community varies. The utility costs for one of the company$$s stores are listed below for the past six months.

Month Total Hours of Operation Total Utility Cost

January $500$ $ $2,520$

February $6002,800$

March $8003,400$

April $4502,450$

May $4002,150$

June $3502,050$

EX $6-34($Algo$)$ Part $1$: The utility costs for one of the company$$s stores are listed below...

Required:

$1-$a$.$ Use the high$-$low method to estimate the cost behavior for the store$$s utility costs. Express the cost behavior in formula form $($Y $=$ a $+$ bX$).$

$1-$b$.$ What is the variable utility cost per hour of operation?

$3-$a$.$ Construct an Excel spreadsheet and use the Excel commands to perform a least$-$squares regression. Estimate the cost behavior for the store's utility cost. Express the cost behavior in formula form.

$3-$b$.$ What is the variable utility cost per hour of operation?

$4.$ During July, the store will be open $300$ hours. Predict the store$$s total utility cost for July using each of the cost$-$estimation methods employed in requirements $(1)$ and $(3).$