Ethan Manufacturing Inc. produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist

Question:

Ethan Manufacturing Inc. produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours:

Month Maintenance Costs Machine Hours $2,600 1 1,690 1,770 1,850 1,870 1,900 1,880 1,860 1,840 1,700 1,100 1,300 1,590 2


Required

1. What is the cost equation for maintenance costs using the high-low method?

2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Cost Management A Strategic Emphasis

ISBN: 9781259917028

8th Edition

Authors: Edward Blocher, David F. Stout, Paul Juras, Steven Smith

Question Posted: