Estimate the variable cost per wedding

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Happy Bakery is a small one-person company that provides elaborate and imaginative wedding cakes to order for very large wedding receptions. The owner of the company would like to understand the cost structure of the company and has compiled the following records of activity and costs incurred. The owner believes that the number of weddings catered is the best measure of activity.

Month                     Weddings                       Costs Incurred

January                     74                             86.400

February                    72                               81.600

March                         78                            96.000

April                            82                           100.800

May                             86                           120.000

June                               90                        144.000

Required

Question 1. Using the high-low method, estimate the variable cost per wedding and the total fixed cost per month. (Round off the variable cost per wedding to the nearest cent and the total fixed cost to the nearest dollar.)

Question 2. Using the least-squares regression method, estimate the variable cost per wedding and the total fixed cost per month. (Round off the variable cost per wedding to the nearest cent and the total fixed cost to the nearest dollar.)

Reference no: EM132567480

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