Wayne Mueller, financial analyst at CELL Corporation, is examining the behav- ior of quarterly utility costs for budgeting purposes. Mueller collects the following data on machine-hours worked and utility costs for the past 8 quarters: Utility Costs $215,000 Quarter Machine-Hours 120,000 150,000 200,000 270,000 170,000 250,000 225,000 195,000 2 75,000 110,000 150,000 90,000 140,000 130,000 3 4 5 100,000 1. Estimate the cost function for the quarterly data using the high-low method. 2. Plot and comment on the estimated cost function. 3. Mueller anticipates that CELL will operate machines for 125,000 hours in quarter 9. Calculate the pre- dicted utility costs in quarter 9 using the cost function estimated in requirement 1.
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- High-low method. Wayne Mueller, financial analyst at CELL Corporation, is examining the behavior of quarterly utility costs for budgeting purposes. Mueller collects the following data on machine-hours worked and utility costs for the past 8 quarters:Ken Howard, financial analyst at KMW Corporation, is examining the behavior of quarterly maintenance costs for budgeting purposes. Howard collects the following data on machine hours worked and maintenance costs for the past 12 quarters: Quarter Machine-Hours 20,000 24,000 22,000 26,000 18,000 ITT Maintenance Costs $ 41,000 48,000 44,000 52,000 38,000 47,000 43,000 51,000 21,000 42,000 25,000 49,000 11 28,000 56,000 12 27,000 57,000 1234567890=2 23,000 21,000 25,000 Required: 1. Estimate the cost function for the quarterly data using the high-low method. 2. Apply Excel to estimated cost function based on the regression method. Plot the results and explain the main contents of the regression table. 3. Howard anticipates that KMW will operate machines for 30,000 hours in quarter 13. Calculate the predicted maintenance costs in quarter 13 using the cost function estimated in requirement 1 and requirement 2. Comment on the accuracy of both methods and which one you will select for future…Crystal Mining has completed the following data to analyze utility cost:MonthMachine Hours Utility CostJanuary200P 300February325440March400480April410490May525620June680790July820840August900900Required:1.Use the least squaresmethod to develop a formula for budgeting utility cost. (Round off value of b to two decimal places and the value of a to nearest peso.2.Prepare flexible budget with separate variable and fixed categories for utility costs at 350, 500, and 600 machine hours.
- Dallus wants to examine the behaviour of maintenance costs for budgeting purpose. The following data on machine hours worked and maintenance costs for the past year are collected: Month Machine Hours Maintenance Cost January 18,000 February 15,000 March 12,750 21,000 April May June 11,880 14,500 July 19,000 August 14,880 September 10,000 October 13,360 November 16,600 December 18,800 $20,600 18,900 15,100 22,010 13,200 19,500 25,000 19,874 12,000 15,500 19,800 13,500 Required: a. Use the high-low method to estimate the variable cost per machine hour and the fixed cost per month. b. Plot and comment on the estimated cost function. C. Develop a formula to express the cost behaviour of ABC's maintenance costs. d. According to the budget, the machine is expected to work 200,000 hours next year. How much is the budgeted maintenance costs?Botana Company constructed the following formula for its monthly utility cost. Total utility cost = $1,200 + ($8.10 × Labor hours) Assume that 775 labor hours are budgeted for the month of April. If Botana Company incurs 9,600 labor hours for the year, what would be the estimate of total utility cost?Veritas Company constructed the following formula for its monthly utility cost. Total utility cost $2,100 + ($5.50 x Labor hours) Assume that 557 labor hours are budgeted for the month of April. If Botana Company incurs 12,600 labor hours for the year, what would be the estimate of total utility cost for the year?
- Using account analysis, Pymble Co. wishes to estimate employees' automobile expenses as a function of miles driven. Costs for the past quarter, during which 58,000 miles were driven, are classified as follows: Item Classification Cost $3,200 11,200 3,900 1,800 2,100 Fuel Variable Fixed Fixed Variable Fixed Depreciation Insurance Maintenance Parking Predict the total cost for the coming quarter for which the employees' auto travel budget would be 65,000 miles: $The controller of the Stump Company is preparing the budget for 2021 and needs to estimate a cost function for delivery costs. Information regarding delivery costs incurred in the prior 2 months are: LOADING... (Click the icon to view the information.) Requirements 1. Estimate the cost function for delivery. 2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain. Requirement 1. Estimate the cost function for delivery. Delivery costs = + ( × ) Delivery costs = + ( × ) Requirement 2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain. The cost function in requirement 1 is an estimate of how costs behave ▼ outside of within the relevant range, not at cost levels ▼ outside within the relevant range. If there are no months with zero miles driven represented in the delivery cost…Automatic Irrigation, Inc. is preparing its manufacturing overhead budget for the 2022 year. Relevant data consist of the following: Qtr. 4 Qtr. 1 Qtr. 2 Qtr. 3 Control Units to be produced (by quarters): 6,000 10,000 12,000 9,000 Direct labor time: 1 hour per unit Variable overhead costs per direct labor hour: Indirect Materials $0.90; Indirect Labor $1.40; and Maintenance $0.50. Fixed overhead costs per quarter: Supervisory salaries $27,600; depreciation $4,000; and maintenance $1,900. Required Prepare the manufacturing overhead budget for the 2022 year showing quarterly data.
- A factory company has compiled the following data for the last six months 2009 to analyze utility cost. Question: What is the budgeted utility cost for Merico 2010 if 33250 machine hours are projected?[The following information applles to the questions displayed below.] ABC Corporation Is a service company that measures Its output based on the number of customers served. The company provided the following fixed and varlable cost estimates that It uses for budgeting purposes and the actual results for May as shown below: Actual Total for May $ 223,500 $ 126,000 20,400 S.44,300 Fixed Element Variable Element per Month per Customer Served $6,100 $ 1,500 Revenue Employee salaries and wages Travel expenses other expenses $ 68,000 $ 47,000 When preparing Its plannlng budget the company estimated that It would serve 35 customers per month; however, during May the company actually served 40 customers. 14. What activity varlance would Adger report In May with respect to Its revenue? (Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.e., zero varlance). Input all amounts as positive values.) Activity varianceAero Travel Trailer Manufacturing is working on budgeting utility cost. The controller has decided that utilities are a function of the hours worked during the month. The following information is available and representative of the company’s utility costs: - Hours worked Utility cost incurred Low point 1,300 $ 903 High point 1,680 1,074 If 1,425 hours are worked in a month, total utility cost (rounded to the nearest dollar) using the high-low method should be Group of answer choices $947. $959. $954. $976.