The Rock-On Mining Company is developing cost formulas for management planning and decision- making purposes. The companys cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base with which the cost might be closely correlated. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information:

Quarter	Tons Mined	Direct Labor-Hours	Utilities Cost
Year 1:
First	15,400	5,400	$	54,000
Second	11,400	3,400	$	49,000
Third	21,400	4,400	$	64,000
Fourth	12,400	6,400	$	79,000
Year 2:
First	18,800	12,000	$	120,000
Second	25,800	11,000	$	125,000
Third	30,800	10,000	$	89,000
Fourth	28,800	13,000	$	128,000

Required:

1(a).	Using tons mined as the independent (X) variable, determine a cost formula for utilities cost using the least-squares regression method. Base your calculations on the data above for Year 1 and Year 2. (Round the "Variable cost per unit" to 2 decimal places and fixed costs to the nearest whole dollar.)

2.	Using direct labor-hours as the independent (X) variable, determine a cost formula for utilities cost using the least-squares regression method. Base your calculations on the data above for Year 1 and Year 2. (Round the "Variable cost per unit" to 2 decimal places and fixed costs to the nearest whole dollar.)