Answer Happy

Required information The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The company's cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base that correlates with the cost. 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 Year 1:1 First Second Third Fourth Year 2: First Second Third Fourth Direct Tons Mined Labor-Hours 17,000 13,000 22,000 14,000 20,000 27,000 32,000 30,000 5,200 3,200 4,200 6,200 10,400 9,600 8,400 11,400 Utilities Cost $ 52,000 $ 47,000 $ 62,000 $ 77,000 $110,000 $115,000 $ 87,000 $124,000 Required: 1. Using the least-squares regression method, estimate the variable utilities cost per ton mined and the total fixed utilities cost per quarter. Express these estimates in the form Ya+bX. (Round the Variable cost per unit to 2 decimal places and Fixed Cost to the nearest whole dollar amount.)