Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 2, Problem 10EB
This cost data from Hickory Furniture is for the year 2017.
- Using the high-low method, express the factory utility expenses as an equation where x represents number of chairs produced.
- Predict the utility costs if 900 chairs are produced.
- Predict the utility costs if 750 chairs are produced.
- Using Excel, create a scatter graph of the cost data and explain the relationship between number of chairs processed and utility expenses.
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Taunton Company uses the high-low method to estimate its cost function. The information for 2017 is provided below:
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Labor Costs
Highest observation of cost driver
3,000
$300,000
Lowest observation of cost driver
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What is the constant for the estimated cost equation?
The Perry Products Company needs to predict the labor cost in producing made-to-order mugs. The following production information is available:
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2012
1,150
850
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2013
1,600
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2014
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800
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2015
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2016
1,500
950
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2017
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875
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Select the appropriate independent variable for estimating labor cost. Explain the reason for your selection.
Develop an equation for labor costs using the high-low method of cost estimation, and predict total costs for an annual usage of 2,500 labor hours.
I need the part of " and predict total costs for an annual usage of 2,500 labor hours." answered it was left off when i first asked this question
The Perry Products Company needs to predict the labor cost in producing made-to-order mugs. The following production information is available:
Year
Mugs Produced
Labor-Hours
Labor Cost
2012
1,150
850
$ 8,400
2013
1,600
975
$ 9,000
2014
1,100
800
$ 7,900
2015
2,100
1,150
$10,700
2016
1,500
950
$ 9,700
2017
1,300
875
$ 9,900
Select the appropriate independent variable for estimating labor cost. Explain the reason for your selection.
Develop an equation for labor costs using the high-low method of cost estimation, and predict total costs for an annual usage of 2,500 labor hours.
Chapter 2 Solutions
Principles of Accounting Volume 2
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