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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: Direct Labor- Utilities Hours Cost Tons Mined Quarter Year 1: First Second Third Fourth Year 2: First Second Third Fourth 16,000 12,000 21,000 13,000 5,100 3,100 4,100 6,100 $ 51,000 $ 46,000 $ 61,000 $ 76,000 19,000 26,000 31,000 29,000 10,500 9,500 8,500 11,500 $ 105,000 $110,000 $ 86,000 $122,000 2-a. Using direct labor-hours as the independent variable, prepare a scattergraph that plots direct labor-hours on the horizontal axis and utilities cost on the vertical axis. Instructions: 1. On the graph below, use the point tool (Year 1-1st quarter) to plot direct labor-hours on the horizontal axis and utilities cost on the Vertical axis. 2. Repeat the same process for the plotter tools (Year 1-2nd quarter to Year 2-4th quarter). 3. To enter exact coordinates, click on the point and enter the values of x and y. 4. To remove a point from the graph, click on the point and select delete option. Year 1 - 1st quarter $140,000 o Year 1 - 2nd quarter $120,000 $100,000 Year 1 - 3rd quarter ies Cost $80,000 Year 1 - 4th quarter Year 1 - 1st quarter $140,000 Year 1 - 2nd quarter $120,000 $100,000 Year 1 - 3rd quarter 8580,000 Year 1 - 4th quarter Utilities E$60.000 $40,000 Year 2 - 1st quarter $20.000 Year 2 - 2nd quarter SO 0 2.000 4.000 6.000 8.000 10,000 12,000 Year 2 - 3rd quarter Direct Labor-Hours 5 reset 2-b. Using the least-squares regression method, estimate the variable utilities cost per direct labor-hour and the total fixed utilities cost per quarter. Express these estimates in the form Y = a +bX. (Round the Variable cost to 2 decimal places and Fixed Cost to the nearest whole dollar amount.) Y= X

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