Create A Spreadsheet For Each Of The Estimation Methods

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Using a blank MS Excel file, create a spreadsheet demonstrating application of the high-low method and regression method of estimating fixed and variable costs as follows: Using the data in Exhibit 2.23 in the textbook, create a spreadsheet for each of the estimation methods: high-low method and regression. Create the data in a chart, show your calculations in words and numbers (meaning don't just show me the numbers, show the formula as well) and be certain to tie in your results to those in the textbook. Compare the results of the two methods for variable cost component and fixed cost component. Now, that you have the hang of it, drop off the month of December from your calculations. Using only the 11 months of data (Jan - Nov), on new worksheet tabs, calculate again using the high-low method and the regression method. Finally, using the results from the 11 month data estimation methods, calculate the expected total cost for the month of December (using the 34,000 units sold), applying the fixed and variable components for each method. How do the calculated expectations compare with the actual data (cost of $540,000). Which method is closer? What are the benefits of each method? What limitations exist with each method?

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