Explain to the Board of directors why they should use the regression method’s estimated total handling cost to make decisions instead of the high-low method. (5 points) N.B. Submit your work with any spreadsheet used.

You just got a job as the cost accountant of a company. On your first meeting with the CEO of your company, he asked you to perform the following task and present it to the Board of directors:
1. Develop a value chain for the company. (20 points)
2. Present the past ten months (January – October) data on material handling cost and the number of moves in a tabular form. (10 points)
3. Use the past ten months (January – October) data on material handling cost and the number of moves to:
a. Determine the high and low points. (5 points)
b. Calculate the variable rate for material handling based on the number of moves. (10 points)
c. Calculate the fixed monthly cost of materials handling. (10 points)
d. Write the cost formula for the materials handling activity showing the fixed cost and the variable rate. (10 points)
e. With your knowledge of cost accounting, use the ten months’ data to estimate the company’s number of moves in November and calculate the total estimated materials handling cost for the month. (10 points)
4. Use a regression method to construct the cost formula for the materials handling cost showing the fixed cost and variable rate. (10 points)
5. Use the regression method to calculate the total estimated materials handling cost for November. (NB: Use the same number of moves you estimated in question 3e). (10 points)
6. Explain to the Board of directors why they should use the regression method’s estimated total handling cost to make decisions instead of the high-low method. (5 points)
N.B. Submit your work with any spreadsheet used.






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