Using Multiple Regression Results to Construct and Apply a Cost Formula The controller for Dohini Manufacturing Company felt that the number of purchase orders alone did not explain the monthly purchasing cost. He knew that nonstandard orders (for example, one requiring an overseas supplier) took more time and effort. He collected data on the number of nonstandard orders for the past 12 months and added that information to the data on purchasing cost and total number of purchase orders. Purchasing Number of Number of Nonstandard Orders Month Cost Purchase Orders January $18,860 370 53 February 18,065 330 35 March 19,250 370 61 April 18,050 410 14 May 19,345 400 73 June 19,500 450 55 July 19,670 460 30 August 20,940 560 80 September 19,430 440 51 October 20,020 500 50 November 18,800 470 12 December 19,340 480 27 Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 14,650 + ($ 8.80 x Purchase orders) + ($ 20.36 x Nonstandard orders) 2. If Dohini Manufacturing Company estimates that next month will have 420 total purchase orders and 45 nonstandard orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 19,262 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,330 purchase orders and 600 nonstandard orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) $ 73,770 X What is the total fixed purchasing cost? 14,650 X Why doesn't it equal the fixed cost calculated in Requirement 2 above? it is the same X because there are more purchase orders because there are 12 months in the year because the high-low method can no longer be used it is the same quirement 2 above