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Dean and Powell Tax Services Company has 31 branch offices in the nation. Each office has about three to six professional accountants and one to two secretaries. In a busy season, the office manager, who is also a professional accountant, can hire temporary employees for support work such as document filing and typing. Norman Dean, the president, is wondering whether he should expand his business by opening more offices. One of the factors that he is considering is how to estimate office support costs. Andrea Jones, the accountant, collected the following cost data for all 31 offices.

Branch	Professional Hours	Support Costs
A1	225	$ 4,241
A2	113	$ 3,435
A3	387	$ 6,398
A4	412	$ 6,502
B1	258	$ 4,140
B2	146	$ 3,368
B3	275	$ 3,820
D	364	$ 6,396
D2	190	$ 3,946
D3	484	$ 8,189
D4	251	$ 4,506
D5	377	$ 6,744
E1	264	$ 4,645
E2	169	$ 6,073
E3	338	$ 6,290
F1	437	$ 9,113
F2	165	$ 3,856
G1	358	$ 5,936
G2	471	$ 8,615
G3	492	$ 9,639
G4	328	$ 5,968
G5	359	$ 7,115
G6	174	$ 3,287
H1	394	$ 7,515
H2	386	$ 7,374
I1	279	$ 5,376
I5	314	$ 5,784
J2	283	$ 5,426
J3	198	$ 4,418
J4	226	$ 4,506
J5	341	$ 6,488

1. Mr. Dean plans to open a new branch office in a Dallas suburb. He expects that the monthly professional hours will be 3,000. Estimate the total office support cost for Mr. Dean. What portion of the total cost is fixed and what portion is variable?

2. Explain how multiple regression analysis could be used to improve the accuracy of the cost estimates.

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