The regression results for total engineering support reported costs as the depen

The regression results for total engineering support reported costs as the dependent variable are:Regression 1: Engineering support reported costs = a + (b A? Machine-hours) The regression results for total engineering support restated costs as the dependent variable are:Regression 2: Engineering support restated costs = a + (b A? Machine-hours)1. Plot the cost functions relating (i) the reported costs for total engineering support to machine-hours and (ii) the restated costs for total engineering support to machine-hours. Comment on the plots.2. Use the high-low method to compute estimates of the cost functions y = a + bX for (a) reported engineering support costs and machine-hours and (b) restated engineering support costs and machine-hours.3. Contrast and evaluate the cost function estimated with regression analysis using restated data for materials and parts with the cost function estimated with regression analysis using the data reported in the plant records. Use the comparison format employed in Exhibit 10-18.4. Of all the cost functions estimated in requirements 2 and 3 which one would you choose to best represent the relationship between engineering support costs and machine-hours? Explain briefly.5. What problems might Kennedy encounter when restating the materials and parts costs recorded to an ?oas used?? or accrual accounting basis?6. Why is it important for Kennedy to choose the correct cost function? That is illustrate two potential problems Kennedy could encounter by choosing a cost function other than the one you chose in requirement 4.7. John Mason the plant manager is not pleased when he sees the restated numbers. He tells Kennedy ?oI think the restated engineering support costs are too high. Please recheck your numbers. They ought to be lower.?? Kennedy is aware that lower costs will result in a higher bonus for Mason. He is also certain that his numbers are correct. What should Kennedydo?