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?