The managing director of a consulting group has the following monthly data on total overhead costs and professional labor hours to bill to clients:
|
Total
|
Billable
|
|
$340,000
|
3,000
|
|
$400,000
|
4,000
|
|
$435,000
|
5,000
|
|
$477,000
|
6,000
|
|
$529,000
|
7,000
|
|
$587,000
|
8,000
|
Develop a regression model to identify the fixed overhead costs to the consulting group.
a. What is the constant component of the consultant group's overhead?
b. If a special job requiring 1,000 billable hours that would contribute a margin of $38,000 before overhead was available, would the job be attractive?