Donner Company would like to estimate the variable and fixed components of its maintenance costs and has compiled the following data for the last 6 months of operations. Maintenance Costs P4,000 3,700 Labor Hours January February March 550 480 12,000 3,400 1,200 430 April May June 3,800 500 510 10
1.Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers. a. What is the estimated variable portion of maintenance costs per labor hour?
2.What is the estimated fixed maintenance cost each month?
3.Formulate the regression equation
4.If it is estimated that 600 labor hours will be used in July, what is the expected total power cost for July?
5.Using the least-squares method of analyzing costs, answer the following questions and show computations to support your answers. a. What is the estimated variable portion of maintenance costs per labor hour?
5a. What is the estimated fixed maintenance cost each month?
5b.Formulate the regression equation
5c.If it is estimated that 600 labor hours will be used in July, what is the expected total power cost for July?
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