manufacturers ltd for the last 12 weeks in the year ended 31st December 2020 Required: a) Using the high-low cost estimation method develop a cost estimation function for Production department Overhead Cost using the Machine hours as the activity level. b) The actual Production Department Overhead Cost in week 12 from above is 963,000. Using the machine hours of 48, direct labour hours of 38 from
The following information has been extracted from the cost information system of Kevian
manufacturers ltd for the last 12 weeks in the year ended 31st December 2020
Required:
a) Using the high-low cost estimation method develop a cost estimation function for Production department Overhead Cost using the Machine hours as the activity level.
b) The actual Production Department Overhead Cost in week 12 from above is 963,000. Using the machine hours of 48, direct labour hours of 38 from week 12 explain which of the two cost functions developed above is more accurate.
c)Calculate and interpret the coefficient of Determination (R^2) using the cost estimation function derived using the Machine hours as the activity level.
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